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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: 1810
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