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Cash Accounts receivable

__________________________ __________________________

Bal. 30,000 Bal. 40,000

_______________ _______________

12/31 Bal. 30,000 12/31 Bal. 40,000

 

Prepaid rent Allowance for uncollectible accounts

__________________________ __________________________

Bal. 2,000 3,000 Bal.

1,000 9. 2,500 2.

_______________ _______________

Bal. 1,000 5,500 12/31 Bal.

 

Prepaid insurance Supplies

__________________________ __________________________

Bal. 0 Bal. 1,500

6. 3,750 700 7.

_______________ _______________

12/31 Bal. 3,750 12/31 Bal. 800

 

Inventory Note receivable

__________________________ __________________________

Bal. 60,000 Bal. 20,000

_______________ _______________

12/31 Bal. 60,000 12/31 Bal. 20,000

 

Equipment Interest receivable

__________________________ __________________________

Bal. 80,000 Bal. 0

5. 1,333

_______________ _______________

12/31 Bal. 80,000 12/31 Bal. 1,333

Problem 2-4 (continued)

Accumulated depreciation Accounts payable

__________________________ __________________________

30,000 Bal. 28,000 Bal.

10,000 1.

_______________ _______________

40,000 12/31 Bal. 28,000 12/31 Bal.

 

Wages payable Note payable

__________________________ __________________________

0 Bal. 50,000 Bal.

1,500 3.

_______________ _______________

1,500 12/31 Bal. 50,000 12/31 Bal.

 

Interest payable Unearned revenue

__________________________ __________________________

0 Bal. 0 Bal.

1,500 4. 2,000 8.

_______________ _______________

1,500 12/31 Bal. 2,000 12/31 Bal.

 

Common stock Retained earnings

__________________________ __________________________

60,000 Bal. 24,500 Bal.

_______________ _______________

60,000 12/31 Bal. 24,500 12/31 Bal.

Problem 2-4 (continued)

InCOME STATEMENT Accounts

Sales revenue Interest revenue

__________________________ __________________________

148,000 Bal. 0 Bal.

8. 2,000 1,333 5.

_______________ _______________

146,000 12/31 Bal. 1,333 12/31 Bal.

 

Cost of goods sold Wage expense

__________________________ __________________________

Bal. 70,000 Bal. 18,900

3. 1,500

_______________ _______________

12/31 Bal. 70,000 12/31 Bal. 20,400

 

Rent expense Depreciation expense

__________________________ __________________________

Bal. 11,000 Bal. 0

9. 1,000 1. 10,000

_______________ _______________

12/31 Bal. 12,000 12/31 Bal. 10,000

 

Interest expense Supplies expense

__________________________ __________________________

Bal. 0 Bal. 1,100

4. 1,500 7. 700

_______________ _______________

12/31 Bal. 1,500 12/31 Bal. 1,800

 

Insurance expense Bad debt expense

__________________________ __________________________

Bal. 6,000 Bal. 3,000

3,750 6. 2. 2,500

_______________ _______________

12/31 Bal. 2,250 12/31 Bal. 5,500

Problem 2-4 (continued)

Requirement 3

         
Account Title Debits   Credits  
Cash 30,000      
Accounts receivable 40,000      
Allowance for uncollectible accounts     5,500  
Prepaid rent 1,000      
Prepaid insurance 3,750      
Supplies      
Inventory 60,000      
Note receivable 20,000      
Interest receivable 1,333      
Equipment 80,000      
Accumulated depreciation-equipment     40,000  
Accounts payable     28,000  
Wages payable     1,500  
Note payable     50,000  
Interest payable     1,500  
Unearned revenue     2,000  
Common stock     60,000  
Retained earnings     24,500  
Sales revenue     146,000  
Interest revenue     1,333  
Cost of goods sold 70,000      
Wage expense 20,400      
Rent expense 12,000      
Depreciation expense 10,000      
Interest expense 1,500      
Supplies expense 1,800      
Insurance expense 2,250      
Bad debt expense 5,500   ______  
Totals 360,333   360,333  
         

 

Problem 2-4 (continued)

Requirement 4

 

       
PASTINA COMPANY      
Income Statement      
For the Year Ended December 31, 2011      
       
Sales revenue .........................................   $146,000  
Cost of goods sold .................................   70,000  
Gross profit ...........................................   76,000  
       
Operating expenses:      
Wages.................................................. $20,400    
Rent .................................................... 12,000    
Depreciation........................................ 10,000    
Supplies .............................................. 1,800    
Insurance ............................................ 2,250    
Bad debt ............................................. 5,500    
Total operating expenses ............   51,950  
Operating income   24,050  
Other income (expense):      
Interest revenue .................................. 1,333    
Interest expense ................................. (1,500) (167)  
Net income .............................................   $ 23,883  
       
                 

 

 

Problem 2-4 (continued)

 

 

 

PASTINA COMPANY

Statement of Shareholders' Equity

For the Year Ended December 31, 2011

 

Total

Common Retained Shareholders’

Stock Earnings Equity

Balance at January 1, 2011 $60,000 $28,500 $ 88,500

 

Issue of common stock - 0 - - 0 -

Net income for 2011 23,883 23,883

Less: Dividends ______ (4,000) (4,000)

Balance at December 31, 2011 $60,000$48,383$108,383

 

 

Problem 2-4 (continued)

 

       
PASTINA COMPANY
Balance Sheet
At December 31, 2011
       
Assets      
       
Current assets:      
Cash .......................................................   $ 30,000  
Accounts receivable ............................... $40,000    
Less: Allowance for uncollectible accounts (5,500) 34,500  
Supplies .................................................    
Inventory ...............................................   60,000  
Note receivable .......................................   20,000  
Interest receivable ..................................   1,333  
Prepaid rent ...........................................   1,000  
Prepaid insurance ...................................   3,750  
Total current assets ............................   151,383  
       
Equipment ................................................ 80,000    
Less: Accumulated depreciation ............. (40,000) 40,000  
Total assets ......................................   $191,383  
       
Liabilities and Shareholders' Equity
       
Current liabilities      
Accounts payable ....................................   $ 28,000  
Wages payable ........................................   1,500  
Note payable .......................................... Interest payable ......................................   50,000 1,500  
Unearned revenue ...................................   2,000  
Total current liabilities .........................   83,000  
       
Shareholders’ equity:      
Common stock ........................................ $60,000    
Retained earnings .................................... 48,383    
Total shareholders’ equity ...................   108,383  
Total liabilities and shareholders’ equity   $191,383  
           

Problem 2-4 (continued)

Requirement 5

 

December 31, 2011

Sales revenue............................................................. 146,000

Interest revenue......................................................... 1,333

Income summary................................................... 147,333

 

Income summary....................................................... 123,450

Cost of goods sold................................................. 70,000

Wage expense........................................................ 20,400

Rent expense......................................................... 12,000

Depreciation expense............................................ 10,000

Interest expense..................................................... 1,500

Supplies expense .................................................. 1,800

Insurance expense................................................. 2,250

Bad debt expense.................................................. 5,500

 

Income summary ($147,333 - 123,450)........................... 23,883

Retained earnings.................................................. 23,883

Problem 2-4 (continued)

 

Sales revenue Interest revenue

__________________________ __________________________

148,000 Bal. 0 Bal.

8. 2,000 1,333 5.

Closing 146,000 Closing 1,333

_______________ _______________

0 12/31 Bal. 0 12/31 Bal.

 

Cost of goods sold Wage expense

__________________________ __________________________

Bal. 70,000 Bal. 18,900

3. 1,500

70,000 Closing 20,400 Closing

_______________ _______________

12/31 Bal. 0 12/31 Bal. 0

 

Date: 2015-12-11; view: 1554

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