Prepare the balance sheet and income statement for the following: • Revolving Fi
ID: 2434526 • Letter: P
Question
Prepare the balance sheet and income statement for the following:• Revolving Fitness reported $850,000 in sales from selling fitness equipment.
• Revolving Fitness purchased $500,000 in fitness equipment on account that it plans to resell.
• Paid $11,500 for the production of a new catalog of fitness equipment the company sells
• Paid its CEO $250,000 for 2009.
• Reported $266,000 in Cost of Goods Sold for 2009.
• Paid $100,000 in sales salaries for 2009.
• Began 2009 with a beginning balance in Cash of $25,750.
• Beginning inventory for 2009 was $525,000.
• Accumulated depreciation at the beginning of 2009 was $300,000.
• Reported depreciation expense of $100,000.
• Purchased supplies for $15,750 in cash used $4,500 in supplies during the year.
• Paid $498,500 on account.
• Paid a total of $50,000 toward the principle on the mortgage loan.
• No dividends were awarded for 2009.
Prepare the balance sheet and income statement for the following:
• Revolving Fitness reported $850,000 in sales from selling fitness equipment.
• Revolving Fitness purchased $500,000 in fitness equipment on account that it plans to resell.
• Paid $11,500 for the production of a new catalog of fitness equipment the company sells
• Paid its CEO $250,000 for 2009.
• Reported $266,000 in Cost of Goods Sold for 2009.
• Paid $100,000 in sales salaries for 2009.
• Began 2009 with a beginning balance in Cash of $25,750.
• Beginning inventory for 2009 was $525,000.
• Accumulated depreciation at the beginning of 2009 was $300,000.
• Reported depreciation expense of $100,000.
• Purchased supplies for $15,750 in cash used $4,500 in supplies during the year.
• Paid $498,500 on account.
• Paid a total of $50,000 toward the principle on the mortgage loan.
• No dividends were awarded for 2009.
Explanation / Answer
Income Statement
At the end of December 31, 2009
Sales
$850,000
Less: Cost of Goods Sold
($266,000)
Gross Profit
$584,000
Less: Selling and Administrative Expenses:
Salaries Paid
($100,000)
Advertising expenses
($11,500)
CEO's Salary
($250,000)
Suppliess expense
($4500)
($366,000)
Less: Depreciation Expenses
($100,000)
Net Income
$118,000
Less: Dividends
$0
Retained Earnings
$118,000
Income Statement
At the end of December 31, 2009
Sales
$850,000
Less: Cost of Goods Sold
($266,000)
Gross Profit
$584,000
Less: Selling and Administrative Expenses:
Salaries Paid
($100,000)
Advertising expenses
($11,500)
CEO's Salary
($250,000)
Suppliess expense
($4500)
($366,000)
Less: Depreciation Expenses
($100,000)
Net Income
$118,000
Less: Dividends
$0
Retained Earnings
$118,000