Question

Question 1 (Note this question is from the Week 5 Tutorial) Sandox Retail has the following unadjusted trial balance as at 30 June 2020 in the table: Accounts Debit ($) Credit ($) Cash 8,524 Accounts Receivable 7,000 Supplies 15,000 Prepaid Insurance 300 Insurance Expense 600 Equipment 27,000 Accumulated Depreciation 12,000 Other Assets 5,100 Wages Payable 1,500 Accounts Payable 7,500 Income Tax Payable 3,150 Share Capital (3000 shares outstanding all year) 16,000 Retained Profit 10,300 Sales Revenue 95,000 COGS 32,900 Wages Expense 18,000 Supplies Expense 25,680 Income Tax Expense 5,346 Total 145,450 145,450 3 Question 1 (Cont’d) Required: a) Prepare an Income Statement for Sandox Retail for the financial year 2019-2020. (2.5 marks) b) Prepare a Balance Sheet as of 30 June 2020. (2.5 marks) c) Prepare the closing journals for Sandox Retail.

Answer 1

a.)	Income Statement	Amount $
	Sales Revenue	95,000
	Less: COGS	32,900
	Gross Profit	62,100
	Less: Expenses
	Wages Expense	18,000
	Insurance Expense	600
	Supplies Expense	25,680
	Income tax Expense	5,346
	Total Expenses	49,626
	Net Income	12,474
b.)	Balance Sheet
	as of 30 June 2020	Amount $
	Assets
	Current Assets
	Cash	8,524
	Accounts receivable	7,000
	Supplies	15,000
	Prepaid Insurance	300
	Non-Current Assets
	Equipment ( Net of Accumulated Depreciation )	15,000
	( 27,000 - 12,000 )
	Other Assets	5,100
	Total Assets	50,924
	Liabilities
	Current Liabilities
	Wages Payable	1,500
	Accounts Payable	7,500
	Income Tax Payable	3,150
	Stockholder's Equity
	Share Capital	16,000
	Retained Profit ( 10,300 + 12,474 )	22,774
	Total Liabilities & Stockholder's Equity	50,924
c.)	Account Titles	Debit $	Credit $
	Sales Revenue	95,000
	Income Summary		95,000
	Income Summary	82,526
	COGS		32,900
	Wages Expense		18,000
	Insurance Expense		600
	Supplies Expense		25,680
	Income tax Expense		5,346
	Income Summary ( 95,000 - 82,526 )	12,474
	Retained profit		12,474