Question

Marmidan Mold Shop Inc. designs and builds molds for the automotive and aircraft industries. The account balances in the company’s general ledger on January 1, 2020 (first day of the new annual fiscal year) were as follows (all account balances are in their normal position):

Cash                                                                    $     3,700

Accounts receivable                                                   5,900

Supplies inventory                                                    29,300

Land                                                                        168,500  

Buildings                                                                 116,500

Accumulated depreciation, buildings                       37,500   

Equipment                                                                 58,500

Accumulated depreciation, equipment                     18,000

Accounts payable                                                      25,200

Income tax payable                                                   16,600

Interest payable                                                           4,200

Wages payable (due in 2020)                                    15,700                                         

9% Notes payable ($10,000 due June 30, 2021,

     balance due June 30, 2022)                                  61,500

Common shares                                                       151,500

Retained earnings, Dec. 31, 2019                              52,200         

Transactions during 2020:

1.The company provided sales services to customers, on credit, for $ 210,300. In addition, the company produced cash sales to customers of $ 62,300.

2.Accounts receivable from customers of $ 15,600 remain to be collected at December 31, 2020.

3.Inventory of $ 62,900 was purchased on credit and debited to the supplies inventory account.

4.Minor parts were purchased with cash for $ 7,400 and debited to the supplies inventory account.

5.Wages payable at the beginning of 2020 were paid early in 2020. In addition, wages were earned by employees and paid during 2020 in the amount of $ 112,000.

6.Income tax payable at the beginning of 2020 was paid early in 2020.

7.Payments of $ 73,000 were made to creditors for supplies previously purchased on credit.

8.One year’s interest at 9% was paid on the notes payable at July 1, 2020.

9. During 2020, Don Tallint, the principal shareholder, purchased a new car for his wife

    Debbie. The new car cost $ 45,000 and was paid for with cash from personal sources.

10.Property taxes were paid on the land and buildings in the amount of $ 17,000 with cash.

11.Dividends were declared and paid in caah in the amount of $ 7,200.

Information available for year end adjusting entries:

12.•Supplies inventory was counted on December 31, 2020 and it was determined the supplies inventory still on hand at yearend was $ 31,900.

13. •Annual depreciation on the buildings is $ 6,000.

14•Annual deprecation on the equipment is $ 5,500

15•Additional wages of $4,000 were earned but are unpaid and unrecorded at December 31, 2020.

16•Interest for six months at 9% per year on the notes payable is unpaid and unrecorded at December 31, 2020.

17•Income taxes of $ 16,500 were unpaid and unrecorded at December 31, 2020.

Required:

Prepare a single step income statement for Marmidan Mold Shop Inc. for the year ended December 31, 2020. (Please record  on the electronic worksheet)

Answer 1

Marmidan Mold Shop Inc.
Single Step Income Statement
For the Year Ended December 31, 2020
Sales		272,600
Operating expenses
Wages expense	116,000
Supplies expense	67,700
Property tax expense	17,000
Depreciation expense	11,500
Interest expense	4,103
Income tax expense	16,500
Total Operating expenses		232,803
Net Income		39,798

Marmidan Mold Shop Inc.
Journal entries
Date	Account	Debit	Credit	Calculation
1	Cash	$     62,300
	Accounts Receivable	$   210,300
	Sales		$   272,600
2	Cash	$   200,600		5900+210300-15600
	Accounts Receivable		$   200,600
3	Supplies Inventory	$     62,900
	Accounts Payable		$     62,900
4	Supplies Inventory	$        7,400
	Cash		$        7,400
5	Wages payable	$     15,700
	Wages expense	$   112,000
	Cash		$   127,700
6	Income tax payable	$     16,600
	Cash		$     16,600
7	Accounts Payable	$     73,000
	Cash		$     73,000
8	Interest Payable	$        4,200
	Interest expense	$        1,335
	Cash		$        5,535	61500*9%
9	No entry
			$               -
10	Property tax expense	$     17,000
	Cash		$     17,000
11	Dividends	$        7,200
	Cash		$        7,200
Adjusting entries
12	Supplies expense	$     67,700
	Supplies Inventory		$     67,700
13	Depreciation expense	$        6,000
	Accumulated depreciation, buildings		$        6,000
14	Depreciation expense	$        5,500
	Accumulated depreciation, equipment		$        5,500
15	Wages expense	$        4,000
	Wages payable		$        4,000
16	Interest expense	$        2,768		61500*9%*6/12
	Interest Payable		$        2,768
17	Income tax expense	$     16,500
	Income tax payable		$     16,500

Marmidan Mold Shop Inc.		Adjusted TB
Account Names		Debit	Credit
Cash		12,165
Accounts Receivable		15,600
Supplies Inventory		31,900
Land		168,500
Buildings		116,500
Accumulated depreciation, buildings			43,500
Equipment		58,500
Accumulated depreciation, equipment			23,500
Accounts Payable			15,100
Income tax payable			16,500
Interest Payable			2,768
Wages payable			4,000
Notes Payable			61,500
Common Stock			151,500
Retained Earnings			52,200
Dividends		7,200
Sales			272,600
Wages expense		116,000
Supplies expense		67,700
Property tax expense		ekkarill92 Next > < Previous Related Solutions Marmidan Mold Shop Inc. designs and builds molds for the automotive and aircraft industries. The account... Marmidan Mold Shop Inc. designs and builds molds for the automotive and aircraft industries. 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Marmidan Mold Shop Inc. designs and builds molds for the automotive and aircraft industries. The account... Marmidan Mold Shop Inc. designs and builds molds for the automotive and aircraft industries. 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Marmidan Mold Shop Inc. designs and builds molds for the automotive and aircraft industries. The account... Marmidan Mold Shop Inc. designs and builds molds for the automotive and aircraft industries. 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Marmidan Mold Shop Inc. designs and builds molds for the automotive and aircraft industries. The account... Marmidan Mold Shop Inc. designs and builds molds for the automotive and aircraft industries. The account balances in the company’s general ledger on January 1, 2020 (first day of the new annual fiscal year) were as follows (all account balances are in their normal position): Cash                                                                    $     3,700 Accounts receivable                                                   5,900 Supplies inventory                                                    29,300 Land                                                                        168,500   Buildings                                                                 116,500 Accumulated depreciation, buildings                       37,500    Equipment                                                                 58,500 Accumulated depreciation, equipment                     18,000 Accounts payable                                                      25,200 Income tax payable                                                   16,600 Interest payable                                                           4,200 Wages payable... Marmidan Mold Shop Inc. designs and builds molds for the automotive and aircraft industries. The account... Marmidan Mold Shop Inc. designs and builds molds for the automotive and aircraft industries. 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Marmidan Mold Shop Inc. designs and builds molds for the automotive and aircraft industries. The account... Marmidan Mold Shop Inc. designs and builds molds for the automotive and aircraft industries. 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Marmidan Mold Shop Inc. designs and builds molds for the automotive and aircraft industries. The account... Marmidan Mold Shop Inc. designs and builds molds for the automotive and aircraft industries. 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