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Maintenance expense

__________________________

Bal. 15,000

_______________

12/31 Bal. 15,000

Problem 2-9 (continued)

Requirement 3

Problem 2-9 (continued)

Requirement 4

 

December 31, 2011

Sales revenue............................................................. 90,000

Interest revenue ........................................................ 3,000

Rent revenue ............................................................ 6,300

Income summary................................................... 99,300

 

Income summary....................................................... 96,850

Salaries expense.................................................... 38,500

Bad debt expense.................................................. 850

Depreciation expense............................................ 11,000

Insurance expense ................................................ 1,500

Utility expense ..................................................... 30,000

Maintenance expense ............................................ 15,000

 

Income summary ($99,300 - 96,850).............................. 2,450

Retained earnings.................................................. 2,450

Problem 2-9 (concluded)

Requirement 5

 

 

Problem 2-10

Computations:

Sales revenue

Sales revenue during 2011 = $320,000 + 22,000 =$342,000

Cost of goods sold

 

Accounts payable

0 1/1 Balance

Cash paid 220,000

?Purchases

30,000 12/31 Balance

 

Purchases during 2011 = $220,000 + 30,000 = $250,000

 

Inventory

1/1 Balance 0

Purchases 250,000

?Cost of goods sold

12/31 Balance 50,000

 

Cost of goods sold during 2011 = $250,000 - 50,000 = $200,000

Rent expense and prepaid rent

Prepaid rent = $ 3,000 x 2/3 = $2,000

Rent expense during 2011 = $14,000 - 2,000 = $12,000

Depreciation expense

Depreciation during 2011 = $30,000 x 10% = $3,000

 

Interest expense

Interest accrued during 2011 = $40,000 x 12% x 9/12 = $3,600

Salaries expense

Cash paid plus accrued salaries = $80,000 + 5,000 =$85,000

Problem 2-10 (continued)

 

     
McGUIRE CORPORATION
Income Statement
For the Year Ended December 31, 2011
     
Sales revenue ..............................................   $342,000
Cost of goods sold ......................................   200,000
Gross profit ................................................   142,000
     
Operating expenses:    
Salaries...................................................... 85,000  
Rent........................................................... 12,000  
Depreciation.............................................. 3,000  
Bad debt.................................................... 3,000  
Miscellaneous ........................................... 10,000  
Total operating expenses ...........   113,000
Operating income ........................................   29,000
Other expense:    
Interest .....................................................   3,600
Net income ..................................................   $ 25,400
     
         

 

Problem 2-10 (concluded)

       
McGUIRE CORPORATION
Balance Sheet
At December 31, 2011
       
Assets      
       
Current assets:      
Cash .......................................................   $ 56,000 (1)
Accounts receivable ............................... $22,000    
Less: Allowance for uncollectible accounts (3,000) 19,000  
Prepaid rent ...........................................   2,000  
Inventory ...............................................   50,000  
Total current assets .............................   127,000  
       
Equipment ................................................ 30,000    
Less: Accumulated depreciation ............. (3,000) 27,000  
Total assets .......................................   $154,000  
       
Liabilities and Shareholders' Equity
       
Current liabilities:      
Accounts payable ...................................   $ 30,000  
Salaries payable .....................................   5,000  
Note payable .......................................... Interest payable ......................................   40,000 3,600  
Total current liabilities .........................   78,600  
       
Shareholders’ equity:      
Common stock ....................................... $50,000    
Retained earnings ................................... 25,400    
Total shareholders’ equity ...................   75,400  
Total liabilities and shareholders’ equity   $154,000  
       

 

(1)$410,000 - 354,000 = $56,000

 

Problem 2-11

Requirement 1

A. Sales revenue

 

Accounts receivable

11/30 Balance 10,000

80,000 Cash collections

Sales revenue ?

12/31 Balance 3,000

 

Sales revenue during December = $3,000 + 80,000 - 10,000 =$73,000

 

B. Cost of goods sold

 

Accounts payable

12,000 11/30 Balance

Cash paid 60,000

?Purchases

15,000 12/31 Balance

 

Purchases during December = $15,000 + 60,000 - 12,000 = $63,000

 

Inventory

11/30 Balance 7,000

Purchases 63,000

?Cost of goods sold

12/31 Balance 6,000

 

Cost of goods sold during December = $7,000 + 63,000 - 6,000 =$64,000

Problem 2-11 (concluded)

Date: 2015-12-11; view: 1530

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