Question

1. Winners industries perform adjusting entries every month, but close its accounts only at year-end. The Agency’s year –end adjusted trail balance dated December 31, 2016, appears below.

DATA
Inventory		6,500
General and admin. Expenses		850
Common Stock		45,000
Cash		16,550
Operating expenses		1,350
Notes payable		600
Interest expense		900
Depreciation expense		500
Net Sales		12,800
Accounts receivable		9,600
Accounts payable		4,800
Long-Term Debt		55,000
Cost of Goods sold		5,750
Buildings and Equipment		122,000
Accumulated Depreciation		34,000
Taxes		1,440
Retained earnings		15,250

Prepare an income statement for the year ended December 31, 2016. Also prepare Winners industries balance sheet dated December 31, 2016.  Also prepare Winners industries balance sheet dated December 31, 2016.

  

Answer 1

Winners Industries
Income Statement
For the year December 31, 2016
Net sales		$12800
Less: Cost of goods sold		($5750)
Gross profit		$7050
Less: Expenses;
Operating expenses	$1350
Depreciation expense	$500
General and admin. Expenses	$850
Interest expense	$900
Taxes	$1440	($5040)
Net income		$2010

Winners Industries
Balance Sheet
As on December 31, 2016
Assets;
Current assets;
Cash	$16550
Inventory	$6500
Accounts receivable	$9600
Total current assets		$32650
Non-current assets;
Buildings and Equipment	$122000
Less: Accumulated depreciation	($34000)	$88000
Total assets		$120650
Liabilities;
Current liabilities;
Accounts payable		$4800
Non-current liabilities;
Notes payable	$600
Long-term debt	$55000	$55600
Total liabilities		$60400
Shareholders’ equity;
Common stock	$45000
Retained earnings	$15250	$60250
Total liabilities and shareholders’ equity		$120650