The following is the balance sheet of Korver Supply Company atDecember 31, 2017. KORVER SUPPLY COMPANY Balance Sheet At December31, 2017
Assets
Cash $ 120,000
Accounts receivable 300,000
Inventories 200,000
Furniture and fixtures, net 150,000
Total assets $ 770,000
Liabilities and Shareholdersâ Equity
Accounts payable (for merchandise) $ 190,000
Note payable 200,000
Interest payable 6,000
Common stock 100,000
Retained earnings 274,000
Total liabilities and shareholders' equity$ 770,000
Transactions during 2018 were as follows:
1. Sales to customers on account $ 800,000
2. Cash collected from customers 780,000
3. Purchase of merchandise on account 550,000
4. Cash payment to suppliers 560,000
5. Cost of merchandise sold 500,000
6. Cash paid for operating expenses 160,000
7. Cash paid for interest on note 12,000
The note payable is dated June 30, 2017 and is due on June 30,2019. Interest at 6% is payable annually on June 30. Depreciationon the furniture and fixtures for the year is $20,000. Thefurniture and fixtures originally cost $300,000.
Required: Prepare a classified balance sheet at December 31,2018 (ignore income taxes).
The following is the balance sheet of Korver Supply Company atDecember 31, 2017. KORVER SUPPLY COMPANY Balance Sheet At December31, 2017
Assets
Cash $ 120,000
Accounts receivable 300,000
Inventories 200,000
Furniture and fixtures, net 150,000
Total assets $ 770,000
Liabilities and Shareholdersâ Equity
Accounts payable (for merchandise) $ 190,000
Note payable 200,000
Interest payable 6,000
Common stock 100,000
Retained earnings 274,000
Total liabilities and shareholders' equity$ 770,000
Transactions during 2018 were as follows:
1. Sales to customers on account $ 800,000
2. Cash collected from customers 780,000
3. Purchase of merchandise on account 550,000
4. Cash payment to suppliers 560,000
5. Cost of merchandise sold 500,000
6. Cash paid for operating expenses 160,000
7. Cash paid for interest on note 12,000
The note payable is dated June 30, 2017 and is due on June 30,2019. Interest at 6% is payable annually on June 30. Depreciationon the furniture and fixtures for the year is $20,000. Thefurniture and fixtures originally cost $300,000.
Required: Prepare a classified balance sheet at December 31,2018 (ignore income taxes).
Related questions
The following balance sheet is for X Company:
| BalanceSheet |
| January1, 2015 |
| Assets | Equities | ||
| Cash | $54,342 | Accounts Payable | $226,404 |
| Accounts Receivable | 11,765 | Wages Payable | 1,302 |
| Inventory | 151,231 | Notes Payable | 34,800 |
| Prepaid Rent | 6,319 | Paid-In Capital | 206,107 |
| Equipment | 313,594 | Retained Earnings | 68,638 |
| Total Assets | $537,251 | Total Equities | $537,251 |
The following summary transactions occurred during 2015:
-borrowed $4,164 from the bank
-paid $80,715 to suppliers for merchandise purchased onaccount
-paid for $56,400 of advertising
-purchased $256,872 of merchandise on account and $201,828 forcash
-sold merchandise for $511,555 on account and $208,945 for cash;the merchandise cost $374,660
-signed a five-year rental lease for $10,000; paid for one yearin advance
-paid $5,989 for land and equipment
-received $217,661 from customers for merchandise sold onaccount
-received $8,160 in cash contributions from new owners
Note: Ignore adjusting entries
What were total liabilities on December 31,2015?
What was net income in 2015?
Adjusted Trial Balance | ||||||||
Account Name | Debit | Credit | Debit | Credit | ||||
cash | $ 35,000.00 | $ 35,000.00 | ||||||
accounts receivable | $ 5,600.00 | $ 6,689.00 | ||||||
food inventory | $ 21,000.00 | $ 21,000.00 | ||||||
merchandise inventory | $ 62,500.00 | $ 62,500.00 | ||||||
prepaids | $ 3,400.00 | $ 7,500.00 | ||||||
computers | $ 30,000.00 | $ 30,000.00 | ||||||
accumulated amort-computers | $ 12,000.00 | $ 18,000.00 | ||||||
bakery equipment | $ 90,000.00 | $ 90,000.00 | ||||||
accumulated amort-bakery eqpmt | $ 18,000.00 | $ 27,000.00 | ||||||
furniture & fixtures | $ 150,000.00 | $ 150,000.00 | ||||||
accumulated amort-furniture | $ 15,000.00 | $ 22,500.00 | ||||||
accounts payable | $ 18,000.00 | $ 18,000.00 | ||||||
accrued liabilities | $ 1,700.00 | |||||||
interest payable | $ 17,600.00 | |||||||
dividend payable | $ 5,000.00 | |||||||
long term loan | $ 220,000.00 | $ 220,000.00 | ||||||
common shares | $ 50,000.00 | $ 50,000.00 | ||||||
retained earnings | $ 22,000.00 | $ 22,000.00 | ||||||
food revenue | $ 468,500.00 | $ 469,589.00 | ||||||
internet revenue | $ 127,000.00 | $ 127,000.00 | ||||||
merchandise revenue | $ 103,000.00 | $ 103,000.00 | ||||||
food expense | $ 240,000.00 | $ 240,000.00 | ||||||
internet expense | $ 54,000.00 | $ 54,000.00 | ||||||
electricity expense | $ 65,000.00 | $ 65,400.00 | ||||||
telephone expense | $ 20,000.00 | $ 20,400.00 | ||||||
interest expense | $ 17,600.00 | |||||||
salary expense | $ 200,000.00 | $ 200,900.00 | ||||||
insurance expense | $ 9,000.00 | $ 4,900.00 | ||||||
supplies expense | $ 8,000.00 | $ 8,000.00 | ||||||
depreciation expense | $ 22,500.00 | |||||||
rent expense | $ 60,000.00 | $ 60,000.00 | ||||||
dividend expense | $ 5,000.00 | |||||||
$ 1,053,500.00 | $1,053,500.00 | $1,101,389.00 | $1,101,389.00 | |||||
INCOME STATEMENT | ||||||||
Income: | ||||||||
food revenue | $ 469,589.00 | |||||||
internet revenue | $ 127,000.00 | |||||||
merchandise revenue | $ 103,000.00 | $699,589.00 | ||||||
Expenses: | ||||||||
food expense | $ 240,000.00 | |||||||
internet expense | $ 54,000.00 | |||||||
electricity expense | $ 65,400.00 | |||||||
telephone expense | $ 20,400.00 | |||||||
salary expense | $ 200,900.00 | |||||||
insurance expense | $ 4,900.00 | |||||||
supplies expense | $ 8,000.00 | |||||||
depreciation expense | $ 22,500.00 | |||||||
rent expense | $ 60,000.00 | $676,100.00 | ||||||
Operating Income | $ 23,489.00 | |||||||
Interest expense | $ 17,600.00 | |||||||
Net Income | $ 5,889.00 | |||||||
BALANCE SHEET | ||||||
ASSETS | LIABILITIES | |||||
Current Assets: | Current liabilities: | |||||
Cash | $ 35,000.00 | Accounts payable | $18,000.00 | |||
Accounts receivable | $ 6,689.00 | accrued liabilities | $ 1,700.00 | |||
Food inventory | $ 21,000.00 | interest payable | $17,600.00 | |||
Merchandise inventory | $ 62,500.00 | dividend payable | $ 5,000.00 | $ 42,300.00 | ||
Prepaids | $ 7,500.00 | $132,689.00 | Long term liabilities: | |||
Fixed Assets: | Long term loan | $220,000.00 | ||||
Computers | $ 30,000.00 | Equity: | ||||
Less accumulated depn | $ 18,000.00 | $ 12,000.00 | Common Shares | $50,000.00 | ||
Bakery equipment | $ 90,000.00 | Retained earnings | $22,889.00 | $ 72,889.00 | ||
Less accumulated depn | $ 27,000.00 | $ 63,000.00 | ||||
Furniture and fixtures | $150,000.00 | |||||
Less accumulated depn | $ 22,500.00 | $127,500.00 | ||||
$335,189.00 | $335,189.00 | |||||
o assess the financial reporting landscape,considering the user needs, constraints, and businessenvironment;
o identify the issues;
o analyze the issues (qualitatively andquantitatively); and
o provide a recommendation for each issueidentified in the case.
The following balance sheet is for X Company:
| BalanceSheet |
| January1, 2015 |
| Assets | Equities | ||
| Cash | $50,817 | Accounts Payable | $239,229 |
| Accounts Receivable | 13,720 | Wages Payable | 1,222 |
| Inventory | 150,655 | Notes Payable | 31,148 |
| Prepaid Rent | 6,320 | Paid-In Capital | 214,693 |
| Equipment | 327,869 | Retained Earnings | 63,089 |
| Total Assets | $549,381 | Total Equities | $549,381 |
The following summary transactions occurred during 2015:
-borrowed $4,605 from the bank
-paid $87,983 to suppliers for merchandise purchased onaccount
-paid for $55,090 of advertising
-purchased $243,155 of merchandise on account and $198,945 forcash
-sold merchandise for $511,876 on account and $189,324 for cash;the merchandise cost $385,660
-signed a four-year rental lease for $8,000; paid for one yearin advance-
-paid $5,854 for land and equipment
-received $226,131 from customers for merchandise sold onaccount
-received $8,564 in cash contributions from new owners
Note: Ignore adjusting entries.
3. What was the cash balance on December 31, 2015?
4. What were total assets on December 31, 2015?
5. What were total liabilities on December 31, 2015?
6. What was net income in 2015?
