Question

Catena's Marketing Company has the following adjusted trial balance at the end of the current year. Cash dividends of $650 were declared at the end of the year, and 680 additional shares of common stock ($0.10 par value per share) were issued at the end of the year for $2,720 in cash (for a total at the end of the year of 810 shares). These effects are included below:

Catena’s Marketing Company
Adjusted Trial Balance
End of the Current Year
	Debit				Credit
Cash	$	1,590
Accounts receivable		2,360
Interest receivable		300
Prepaid insurance		1,600
Long-term notes receivable		2,930
Equipment		15,800
Accumulated depreciation				$	2,960
Accounts payable					2,290
Dividends payable					650
Accrued expenses payable					3,910
Income taxes payable					2,680
Unearned rent revenue					470
Common Stock (810 shares)					81
Additional paid-in capital					3,519
Retained earnings					3,090
Sales revenue					37,350
Interest revenue					130
Rent revenue					670
Wages expense		18,400
Depreciation expense		1,740
Utilities expense		390
Insurance expense		730
Rent expense		9,230
Income tax expense		2,730
Total	$	57,800		$	57,800

Prepare a classified balance sheet for the end of the current year.

Answer 1

Catena Marketing Company
Balance Sheet
Assets
Current assets
Cash	$1,590.00
Accounts receivable	$2,360.00
Interest Receivable	$300.00
Prepaid Insurance	$1,600.00
Total current assets		$5,850.00
Long Term Note Receivable		$2,930.00
Property Plant & Equipment
Equipment	$15,800.00
Accumulated Dep- Equipment	-$2,960.00	$12,840.00
Total assets		$21,620.00
Liabilities
Current liabilities
Account Payable	$2,290.00
Dividend Payable	$650.00
Accrued Expense Payable	$3,910.00
Income Tax Payable	$2,680.00
Unearned Rent Revenue	$470.00
Total current liabilities		$10,000.00
Total liabilities		$10,000.00
Stockholders' Equity
Common stock	$81.00
Additional Paid in Capital	$3,519.00
Retained earnings (3090+4930)	$8,020.00
Total stockholders' equity		$11,620.00
Total liabilities and stockholders' equity		$21,620.00
Computation of Net Income
Sale Revenue		$37,350.00
Interest Revenue		$130.00
Rent Revenue		$670.00
Less: Expense
Salaries & Wages Expense	$18,400.00
Utilities Expense	$390.00
Rent Expense	$9,230.00
Insurance Expense	$730.00
Income Tax Expense	$2,730.00
Depreciaiton Expense	$1,740.00	$33,220.00
Net Income		$4,930.00