Blooming Flower Company was started in 2018 when it acquired $60,000 cash from t
ID: 2590037 • Letter: B
Question
Blooming Flower Company was started in 2018 when it acquired $60,000 cash from the issue of common stock. The following data summarize the company’s first three years’ operating activities. Assume that all transactions were cash transactions.
Required
Prepare an income statement (use multistep format) and balance sheet for each fiscal year. (Hint: Record the transaction data for each accounting period in the accounting equation before preparing the statements for that year.)
2018 $50,000 68,000 34,000 29,000 2019 $60,000 85,000 43,000 35,000 2020 S 85,000 Purchases of inventory Sales Cost of goods sold Selling and administrative expenses 130,000 71,000 42,000Explanation / Answer
Blooming Flower Company Income Statements For the year Ended December 31st Amount $ 2018 2019 2020 Sales 68,000 85,000 130,000 Total Revenue 68,000 85,000 130,000 Operating Expenses: Cost of goods Sold 34,000 43,000 71,000 Selling and Adm. Expenses 29,000 35,000 42,000 Total Operating Expenses 63,000 78,000 113,000 Net Income - C/F to Retained Earnings 5,000 7,000 17,000 ( II - IV) Blooming Flower Company Balance Sheets As of year Ended December 31st Amount $ 2018 2019 2020 Assets : Cash 49,000 39,000 42,000 Inventory 16,000 33,000 47,000 Total Assets 65,000 72,000 89,000 Liabilities : Stake Holders Equity 60,000 60,000 60,000 Retained Earnings 5,000 12,000 29,000 Total Liabilities and Stakeholders equity 65,000 72,000 89,000 Workings : Amount $ I Cash Statements 2018 2019 2020 Opening Balance 60,000 49,000 39,000 ADD : Sales 68,000 85,000 130,000 Less : Purchases 50,000 60,000 85,000 Less : Selling & Admi Exp 29,000 35,000 42,000 Closing Balance 49,000 39,000 42,000 II Inventory Statements 2018 2019 2020 Opening Balance - 16,000 33,000 ADD : Purchases 50,000 60,000 85,000 Less : Sales 34,000 43,000 71,000 Closing Balance 16,000 33,000 47,000