CATEGORIES:

# 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

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: 854

 <== previous page | next page ==> Salaries expense Income summary | Zambrano Wholesale Corporation
doclecture.net - lectures - 2014-2021 year. Copyright infringement or personal data (0.004 sec.)