Prepare financial statements for 2017: Adjusted Trial Balance 2017 Description D
ID: 2536990 • Letter: P
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 2,061,644.80Explanation / Answer
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.
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 AssumptionThis 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.