Question

Based on the following information can you confirm the Income Statement and Balance Sheet were done correctly? Both have been completed after the information. If there is an error please list why there is an error, they appear correct to me. Thank you, and please take your time....

Income Statement Data for 20XX:

Units produced and sold = 420

Sales ($80 per unit selling price) = $33600

Cost of goods sold ($30 per unit, all variable costs) = $12600

Labor = $0 (Mr. and Mr. Lee were the only ones working and did not pay themselves)

Advertising fees =$2000

Bank fees = $150

Phone/internet = $1200

Shipping ($3 per unit) = $1260

Utilities = $900

Office supplies = $800

Interest expense on note payable = $350

Depreciation expense (straight line) = $800

Income tax rate = 26 %

Other Financial Data for 20XX:

Proceeds from sale of equipment = $3000. The equipment originally cost $1000 and had accumulated depreciation of $200.

Purchase of equipment = $1600 (The machine is purchased on the last day of 20XX so no depreciation expense is recorded.)

Repayment of note payable = $5000

Consider any data relevant from the income statement.

Balance Sheet Data for Beginning of 20XX:

Cash and cash equivalents = $10000

Accounts receivable = $0 (Cash is received at time of sale)

Raw materials inventory = $10500

Equipment = $5000 (This includes the $1000 cost of the equipment sold in 20XX).

Accumulated depreciation = $1,000 (This includes the accumulated depreciation of 200 for the equipment sold in 20XX.

Accounts payable = $0 (Cash is paid at the time of purchase.)

Note payable = $5000 (This is the note payable which is repaid in 20XX)

Common stock = $15000

Retained earnings = $4500

Income Statement Data for 20XX:

Units produced and sold = 420

Sales ($80 per unit selling price) = $33600

Cost of goods sold ($30 per unit, all variable costs) = $12600

Labor = $0 (Mr. and Mr. Lee were the only ones working and did not pay themselves)

Advertising fees =$2000

Bank fees = $150

Phone/internet = $1200

Shipping ($3 per unit) = $1260

Utilities = $900

Office supplies = $800

Interest expense on note payable = $350

Depreciation expense (straight line) = $800

Income tax rate = 26 %

Other Financial Data for 20XX:

Proceeds from sale of equipment = $3000. The equipment originally cost $1000 and had accumulated depreciation of $200.

Purchase of equipment = $1600 (The machine is purchased on the last day of 20XX so no depreciation expense is recorded.)

Repayment of note payable = $5000

Consider any data relevant from the income statement.

Balance Sheet Data for Beginning of 20XX:

Cash and cash equivalents = $10000

Accounts receivable = $0 (Cash is received at time of sale)

Raw materials inventory = $10500

Equipment = $5000 (This includes the $1000 cost of the equipment sold in 20XX).

Accumulated depreciation = $1,000 (This includes the accumulated depreciation of 200 for the equipment sold in 20XX.

Accounts payable = $0 (Cash is paid at the time of purchase.)

Note payable = $5000 (This is the note payable which is repaid in 20XX)

Common stock = $15000

Retained earnings = $4500

Income Statement
for the period 1 January 20XX to 31 December 20XX
Revenue
Sales	33,600
Cost of Goods Sold	(12,600)
Gross Profit	21,000
Operating Expenses
Advertising Fees	2,000
Bank Fees	150
Phone/Internet	1,200
Shipping	1,260
Utilities	900
Office Supplies	800
Depreciation Expense	800
Total Operating Expenses	7,110
Operating Profit (EBIT)	13,890
Other Income and (expenses)
Interest expenses	(350)
Gain on sale of equipment	2,200
Profit Before Taxes (EBT)	15,740
Income Tax	4,092
Net Income	11,648

Balance Sheet
For Year Ending 20XX
Assets
Current Assets
Cash and Cash equivalents				16,648
Accounts receivables				-
Raw materials inventory				10,500
Total current assets				27,148
Non-current Assets
Equipment		5,600
Less: accum. depreciation		(800)		4,800
Total assets				31,948
Liabilities & Stockholders'equity
Current Liabilities
Accounts payable				-
Total Current Liabilities				-
Note payable				-
Total Liabilities				-
Stockholders' equity
Common Stock				15,000
Retained earnings				16,948
Total stockholders' equity				31,948
Total liabilities & stockholders' equity				31,948

Answer 1

The answer is absolutelycorrect.Great Work done.

Income Statement
for the period 1 January 20XX to 31 December 20XX
Revenue
Sales	33,600
Cost of Goods Sold	-12,600
Gross Profit	21,000
Operating Expenses
Advertising Fees	2,000
Bank Fees	150
Phone/Internet	1,200
Shipping	1,260
Utilities	900
Office Supplies	800
Depreciation Expense	800
Total Operating Expenses	7,110
Operating Profit (EBIT)	13,890
Other Income and (expenses)
Interest expenses	-350
Gain on sale of equipment	2,200
Profit Before Taxes (EBT)	15,740
Income Tax	4,092
Net Income	11,648
Balance Sheet
For Year Ending 20XX
Assets
Current Assets
Cash and Cash equivalents				16,648
Accounts receivables				-
Raw materials inventory				10,500
Total current assets				27,148
Non-current Assets
Equipment		5,600
Less: accum. depreciation		(800)		4,800
Total assets				31,948
Liabilities & Stockholders'equity
Current Liabilities
Accounts payable				-
Total Current Liabilities				-
Note payable				-
Total Liabilities				-
Stockholders' equity
Common Stock				15,000
Retained earnings				16,948
Total stockholders' equity				31,948
Total liabilities & stockholders' equity				31,948