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Question: What is the ending inventory balance? Softbyte Inc. Balance Sheet December 31, 2017 Assets Cash                        &nbsp

Question: What is the ending inventory balance?

Softbyte Inc.

Balance Sheet

December 31, 2017

Assets

Cash                                                                                                    $500,000

Accounts Receivable                                                                        700,000                                

Inventory                                                                                           300,000

Property, Plant & Equipment                            900,000

Accumulated Depreciation                              (100,000)              800,000

Total Assets                                                                                    $2,300,000

Liabilities & Equity

Accounts Payable                                                                          $300,000

Notes Payable                                                                                  1,000,000

Common Stock                                                                                  500,000

Retained Earnings                                                                            500,000

Total Liabilities & Equity                                                        $2,300,000

Instructions:

Open the balances in the ledger accounts.

Post the journal entries to the general ledger.

Prepare an income statement, statement of retained earnings, balance sheet, and statement of cash flows-indirect method.

Journal Entries for January 2013

Transaction 1: Services Provided for Cash

Description: Receives $155,000 cash from customers for programming services it has provided.

Journal Entry:                                                                                                                  Dr.                                 Cr.

Cash                                                                                                                                   155,000

            Sales                                                                                                                                                             155,000  

Transaction 2: Receipt of Cash on Account

Description: Receives $28,000 in cash from customers who had been billed for services.

Journal Entry:                                                                                                           Dr.                              Cr.

Cash                                                                                                                          28,000                              

          Accounts Receivable                                                                                                                                 28,000
          

Transaction 3: Cost Flow Assumption: LIFO

Description: Recorded $45,000 in cost of goods sold under the LIFO cost flow assumption.

Journal Entry:                                                                                                                     Dr.                                  Cr.

Cost of Goods Sold                                                                                                           45,000

                    Inventory                                                                                                                                                  45,000

Transaction 4: Recording Depreciation Expense

Description: Recorded depreciation expense under the straight-line method.

Journal Entry:                                                                                                                      Dr.                                  Cr.

Depreciation Expense                                                                                                        9,000

                    Accumulated Depreciation                                                                                                                       9,000

Transaction 5: Sale of Plant Asset

Description: Sale of plant asset for cash. The cash received was equal to the book value.

Journal Entry:                                                                                                                Dr.                                        Cr.

Cash                                                                                                                                   3,000

Accumulated Depreciation                                                                                            16,000

                    Equipment                                                                                                                                                 19,000

Transaction 6: Gain on Sale of Plant Asset

Description: Sale of plant asset for cash. The cash received was $2,000 more than the book value resulting in a gain.

Journal Entry:                                                                                                                    Dr.                                       Cr.

Cash                                                                                                                                   5,000

Accumulated Depreciation                                                                                          16,000

                    Gain                                                                                                                                                              2,000

                    Equipment                                                                                                                                                 19,000

Transaction 7: Loss on Sale of Plant Asset

Description: Sale of plant asset for cash. The cash received was $500 less than the book value resulting in a loss.

Journal Entry:                                                                                                                    Dr.                                       Cr.

Cash                                                                                                                                      2,500

Loss                                                                                                                                         500

Accumulated Depreciation                                                                                           13,000

                    Equipment                                                                                                                                                16,000

Transaction 8: Note Given to Borrow from Bank

Description: Borrowed $2,000 cash with a 60-day, 12%, $2,000 note.

Journal Entry:                                                                                                                    Dr.                                        Cr.

Cash                                                                                                                                   2,000

                    Notes Payable                                                                                                                                               2,000

Transaction 9: Payment of Note

Description: Paid the principal and interest on the note in Transaction 8.

Journal Entry:                                                                                                                    Dr.                                          Cr.

Notes Payable                                                                                                                 2,000

Interest Expense                                                                                                                 40

                    Cash                                                                                                                                                               2,040

Transaction 10: Bond Issue

Description: Issued a $100,000 Par Value Bond at a Discount

Journal Entry:                                                                                                                     Dr.                                        Cr.

Cash                                                                                                                                  96,454

                    Bonds Payable                                                                                                                                                96,454

Transaction 11: Effective Interest Amortization

Description: Recorded bond interest expense under the effective interest method.

Journal Entry:                                                                                                                       Dr.                                       Cr.

Bond Interest Expense                                                                                                   4,823

                    Bonds Payable                                                                                                                                                  823

                    Cash                                                                                                                                                                   4,000

Transaction 12: Issuing Par Value Stock at a Premium

Description: Issued common stock and received cash of $50,000 in excess of par value.

Journal Entry:                                                                                                                        Dr.                          Cr.

Cash                                                                                                                                  350,000

                    Common Stock , $10 Par Value                                                                                                 300,000

                    Paid-in Capital in Excess of Par Value, Common Stock                                                       50,000

Transaction 13: Dividend

Description: The corporation pays a dividend of $3,800 in cash to the stockholders of Softbyte.

Journal Entry:                                                                                                                         Dr.                             Cr.

Dividends                                                                                                                              3,800

            Cash                                                                                                                                                                 3,800

Solutions

Expert Solution

Cash:

Beginning balance 500,000 Note Payable 2,000
Sales 155,000 Interest Expense 40
Accounts Receivable 28,000 Bond Interest Expense 4,000
Asset Disposal 3,000 Dividends 3,800
Asset Disposal 5,000
Asset Disposal 2,500
Notes Payable 2,000
Bond Payable 96,454
Common Stock 300,000
Paid-in Capital in Excess of Par 50,000
Ending balance 1,132,114

Accounts Receivable

Beginning balance 700,000 Cash 28,000
Ending balance 672,000

Inventory

Beginning Balance 300,000 Cost of Goods Sold 45,000
Ending balance 255,000

Property, Plant and Equipment

Beginning balance 900,000 Asset Disposal 19,000
Asset Disposal 19,000
Asset Disposal 16,000
Ending balance 846,000

Accumulated Depreciation

Asset Disposal 16,000 Beginning balance 100,000
Asset Disposal 16,000 Depreciation Expense 9,000
Asset Disposal 13,000
Ending balance 64,000

Accounts Payable

Beginning balance 300,000
Ending balance 300,000

Notes Payable

Cash 2,000 Beginning balance 1,000,000
Cash 2,000
Ending balance 1,000,000

Bond Payable

Cash 96,454
Discount on Bonds Payable 823
Ending balance 97,277

Common Stock

Beginning balance 500,000
Cash 300,000
Ending balance 800,000

Paid-in Capital in Excess of Par: Common Stock

Cash 50,000
Ending balance 50,000

Retained Earnings

Beginning balance 500,000

Sales:

Cash 155,000

Cost of Goods Sold:

Inventory 45,000

Depreciation Expense:

Accumulated Depreciation 9,000

Gain on Disposal of Equipment:

Asset Disposal 2,000

Loss on Disposal of Equipment:

Asset Disposal 500

Interest Expense:

Cash 40

Softbyte Inc.

Trial Balance

January 31, 2018

Account Titles Debit Credit
$ $
Cash 1,132,114
Accounts Receivable 672,000
Inventory 255,000
Property Plant and Equipment 846,000
Accumulated Depreciation 64,000
Accounts Payable 300,000
Notes Payable 1,000,000
Bonds Payable 97,277
Dividends 3,800
Common Stock 800,000
Paid-in Capital in Excess of Par 50,000
Retained Earnings 500,000
Sales 155,000
Gain on Disposall of Asset 2,000
Cost of Goods Sold 45,000
Depreciation Expense 9,000
Loss on Disposal of Asset 500
Interest Expense 4,863
Totals 2,968,277 2,968,277

Softbyte Inc.

Income Statement

For the month ended January 31, 2018

Sales $ 155,000
Cost of Goods Sold 45,000
Gross Profit 110,000
Depreciation Expense 9,000
Operating Profit 101,000
Other Income ( Loss / Expense)
Gain on Sale of Plant 2,000
Loss on Sale of Plant (500)
Interest Expense (4,863) (3,363)
Net Income 97,637

Softbyte Inc.

Statement of Retained Earnings

For the month ended January 31, 2018

Balance, January 1 500,000
Net Income 97,637
Dividends (3,800)
Balance, January 31 593,837

Softbyte Inc.

Balance Sheet

January 31, 2018

Assets $ Liabilities and Equity $
Cash 1,132,114 Accounts Payable 300,000
Accounts Receivable 672,000 Notes Payable 1,000,000
Inventory 255,000 Bonds Payable 97,277
Property, Plant and Equipment, net 782,000 Common Stock 800,000
Paid-in Capital in Excess of Par: Common Stock 50,000
Retained Earnings 593,837
Total Assets 2,841,114 Total Liabilities and Equity 2,841,114

Softbyte Inc.

Statement of Cash Flows

For the month ended January 31, 2018

$ $
Cash Flows from Operating Activities
Net Income 97,637
Adjustments to reconcile net income to net cash flows from operations
Depreciation Expense 9,000
Interest Expense 4,863
Loss on disposal of plant 500
Gain on disposal of plant (2,000)
Decrease in accounts receivable 28,000
Decrease in inventory 45,000 85,363
Net Cash Flows From Operations 183,000
Cash Flows from Investing Activities
Proceeds from Sale of Plant 10,500
Net Cash Flows from Investing Activities 10,500
Cash Flows from Financing Activities
Cash received from issuance of Common Stock 350,000
Cash received from issuance of Bonds 96,454
Interest Paid (4,040)
Dividend paid (3,800)
Net Cash Flows from Financing Activities 438,614
Net Increase ( decrease) in Cash 632,114
Cash Balance, December 31 2017 500,000
Cash Balance, January 31, 2018 1,132,114

ekkarill92 answered 1 year ago
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