Prepare Balance Sheet and Income Statement for 2010 and 2011. Managerial Corpora
ID: 2360206 • Letter: P
Question
Prepare Balance Sheet and Income Statement for 2010 and 2011.
Managerial Corporation was formed by issuing capital stock for $1 million dollars
Land was purchased for $120,000. The purchase was structured in the following way: $20,000 cash, and $100,000 Long-term not payable.
$650,000 of products were sold, $100,000 of these amounts were not collected.
Cost of Goods Sold equaled $325,000.
Operating expenses equaled $200,000 of which $50,000 was outstanding at year end.
The market value for the land at year end was $130,000
$5,000 of the note payable for the land was paid during 2010.
Inventory at year end was $65,000.
Capitalized Research and Development $200,000
Total Assets should equal $1,270,000.
Year 2011
Sales totaled $900,000 of which $350,000 were not collected by year end.
Cost of goods sold equaled $600,000.
Operating expense equaled $220,000 of which $30,000 was unpaid at year end.
The Fair Market Value of the land dropped to $80,000.
$10,000 of the Long-term note for the land was paid off.
Inventory at year end was $450,000.
Capitalized Research and Development $200,000 (unchanged)
Explanation / Answer
balance sheet 2010
income statement 2010
cash
785,000
AP
50,000
sales
650,000
land
120,000
LTNP
95,000
less cogs
-325,000
AR
100,000
CS
1,000,000
gross profit
325,000
inventory
65,000
RE
125,000
OE
-200,000
R&D
200,000
Total
1,270,000
Net income
125,000
total
1,270,000
income statement for 2011
Balance Sheet for 2011
sales
900,000
cash
200,000
AP
30,000
less cogs
-600,000
land
120,000
LTNP
85,000
gross profit
300,000
AR
350,000
CS
1,000,000
oe
-220,000
inventory
450,000
RE
205,000
net income
80,000
R&D
200,000
total
1,320,000
total
1,320,000
I assumed that the 10,000 paid on the land for 2011 was not the total paid for all years, that it was just the amount paid in 2011 if this is not the case, then cash will need to be increased then in the bs for 2011, cash, LTNP, total assets and total liabilities&equity will all have to be increased by 5,000
also some of my abbreviations: AR - accounts receivalbe, oe - operating expense ap - accounts payable, ltnp - long term notes payable, cs - capital stock, RE - retained earnings cogs - cost of goods sold r&D - research and development
balance sheet 2010
income statement 2010
cash
785,000
AP
50,000
sales
650,000
land
120,000
LTNP
95,000
less cogs
-325,000
AR
100,000
CS
1,000,000
gross profit
325,000
inventory
65,000
RE
125,000
OE
-200,000
R&D
200,000
Total
1,270,000
Net income
125,000
total
1,270,000
income statement for 2011
Balance Sheet for 2011
sales
900,000
cash
200,000
AP
30,000
less cogs
-600,000
land
120,000
LTNP
85,000
gross profit
300,000
AR
350,000
CS
1,000,000
oe
-220,000
inventory
450,000
RE
205,000
net income
80,000
R&D
200,000
total
1,320,000
total
1,320,000