Question

Prepare financial statements for 2017:

Adjusted Trial Balance 2017
Description	Debit	Credit
Cash	154,000.00
Owner's Equity		250,000.00
Common Stock		100,000.00
Equipment	150,000.00
Depreciation	15,000.00
Accumulated Depreciation		15,000.00
Rent Expense	72,000.00
Office Supplies	90,000.00
Accounts Payable		90,000.00
Supplies Expense	16,700.00
Supplies on Hand		16,700.00
Utilities	54,000.00
Wages Payable	204,000.00
Federal Taxes Withheld		54,000.00
State Taxes Withheld		74,400.00
FICA		15,606.00
FUTA		1,632.00
SUTA		7,650.00
Salary		50,712.00
Rent Revenue		80,000.00
COGS	505,944.80
Inventory		505,944.80
Accounts Receivable	800,000.00
Sales		800,000.00
Total	2,061,644.80	2,061,644.80

Answer 1

	Income Statement For the year ended 2017
	Particulars		Amount in $
	Revenues:
	Sales revenue		800,000.00
	Less : Cost of goods Sold		(505,944.80)
	Gross Profit (A)		294,055
	Operating Expenses:
	Depreciation expense	15000
	Office Supplies Expense	90000
	Supplies Expense	16700
	Utillities Expense	54000
	Rent expense	72000
	Total operating expenses (B)		247,700
	Operating Income C =(A-B)		46,355
	Other Income:
	Rent revenue	80000
	Total Other Income (D)		80,000.00
	Net Income (C+D)		126,355.2
Statement of Retained Earnings
For the Year Ended 2017
Particulars		Amount in $
Opening Balance		-
Net Income of the Year		126,355.2
Closing Balance		126355.2
	Balance Sheet as on 31.12.2017
Particulars		Amount (in $)
Assets
Current Assets
Cash		154000
Account Receivable		800000
Wages Payable (Prepaid)		204000
Total Current Assets (A)		1158000
Property, Plant & Equipment
Equipment		150000
Less : Accumulated Depreciation		-15000
Total Property, Plant & Equipment (B)		135000
Total Assets (A+B)		1293000
Liablities
Current Liablities
Federal Taxes Withheld		54000
State Taxes Withheld		74400
FICA		15606
FUTA		1632
SUTA		7650
Salary		50712
Liablity against Inventories		505,944.80
Accounts Payable		90000
Supplies on Hand		16700
Total Current Liablities (A)		816644.8
Stockholder Equity
Owner Equity		250000
Common Stock		100000
Retained Earnings		126355.2
Total Stockholder Equity (B)		476,355.20
Total Liablities (A+B)		1293000
Statement of Cash Flow using Indirect Method Particulars Amount in $ Cash Flow From Operating Activities Net Income 126355.2 Add : Non Cash Expenses Depreciation 15,000 Less :Increase in Current Assets -1,004,000 Add :Increase in Current Liablites 816,645 -172,355 Net cash Used operating activities (A) -46,000 Cash flows from investing activities Cash paid for equipment -150000 Net cash used in investing activities (B) -150,000 Cash flows from financing activities Cash received from sale of common stock 100000 Proceeds from Owner Capital 250000 Net cash used in financing activities ( C) 350,000 Net increase in cash and cash equivalents (A+B+C) 154,000 Cash at the beginning of the Year Cash at the end of the Year 154000 Assumption
This Entire solution has based on Assumption as follows . 1- Office Supplies and Utilities are treated as expenses and same has been disclosed in Income Statement. 2-Credit balance of inventory of $505944.80 treated as liabilities against for Purchase. So, it has been disclosed in Current liabilities in Balance Sheet. 3- Debit balance of Wages payable treated as prepaid expenses. Thus, it has been disclosed in Current asset.