Question

Superior Hardwood Company distributes hardwood products to small furniture manufacturers. The adjusted trial balance data given below is from the firm’s worksheet for the year ended December 31, 2019. ACCOUNTS Debit Credit Cash $ 22,700 Petty Cash Fund 600 Notes Receivable, due 2020 10,400 Accounts Receivable 83,000 Allowance for Doubtful Accounts $ 4,600 Merchandise Inventory 220,000 Warehouse Supplies 2,720 Office Supplies 1,280 Prepaid Insurance 6,000 Land 32,000 Building 164,000 Accumulated Depreciation—Building 45,600 Warehouse Equipment 30,000 Accumulated Depreciation—Warehouse Equipment 13,200 Delivery Equipment 44,000 Accumulated Depreciation—Delivery Equipment 16,800 Office Equipment 18,000 Accumulated Depreciation—Office Equipment 7,800 Notes Payable, due 2020 18,800 Accounts Payable 37,600 Interest Payable 440 Mortgage Payable 54,000 Loans Payable, Long-term 10,000 Charles Ronie, Capital (Jan. 1) 337,960 Charles Ronie, Drawing 125,600 Income Summary 230,000 220,000 Sales 1,693,000 Sales Returns and Allowances 16,800 Interest Income 1,440 Purchases 753,000 Freight In 12,400 Purchases Returns and Allowances 7,040 Purchases Discounts 9,760 Warehouse Wages Expense 185,600 Warehouse Supplies Expense 5,700 Depreciation Expense—Warehouse Equipment 4,400 Salaries Expense—Sales 255,200 Travel and Entertainment Expense 20,100 Delivery Wages Expense 58,930 Depreciation Expense—Delivery Equipment 8,400 Salaries Expense—Office 69,200 Office Supplies Expense 2,600 Insurance Expense 4,800 Utilities Expense 7,890 Telephone Expense 5,120 Payroll Taxes Expense 52,000 Property Taxes Expense 4,200 Uncollectible Accounts Expense 4,400 Depreciation Expense—Building 7,600 Depreciation Expense—Office Equipment 2,600 Interest Expense 6,800 Totals $ 2,478,040 $ 2,478,040 Required: Prepare a classified income statement for the year ended December 31, 2019. The expense accounts represent warehouse expenses, selling expenses, and general and administrative expenses. Prepare a statement of owner’s equity for the year ended December 31, 2019. No additional investments were made during the period. Prepare a classified balance sheet as of December 31, 2019. The mortgage payable extends for more than a year. Analyze: What is the current ratio for this business?

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Prepare a classified income statement for the year ended December 31, 2019. The expense accounts represent warehouse expenses, selling expenses, and general and administrative expenses.

SUPERIOR HARDWOOD COMPANY Income Statement Operating revenue Net sales Cost of goods sold Merchandise inventory, January 1, 2019 Delivered cost of purchases $0 0 Net delivered cost of purchases 0 Total merchandise available for sale $0 0 Gross profit on sales $0 Operating expenses Warehouse expenses Total warehouse expenses $0 Selling expenses Total selling expenses $0 General and administrative expenses Total general and administrative exp. $0 Total operating expenses 0 Income from operations $0 Other income Other expenses Net nonoperating expenses 0 Net income for year $0

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