ACCOUNTING Lecture Notes - Comprehensive Income, Deferral, Accounts Payable
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Nelson Co.
Income Statement
For the years ending
12/31/13 | 12/31/14 | |
Sales | $8,500,000 | $9,150,000 |
Cost of goods sold | 4,500,000 | 5,350,000 |
Gross profit | ||
Selling Expense | 1,600,000 | 1,900,000 |
Administrative expense | 1,300,000 | 1,400,000 |
Income from operations | ||
Other Income | 40,000 | 150,000 |
Interest expense | 50,000 | 30,000 |
Income before taxes | ||
Income taxes 25% | ||
Net Income |
Nelson Co.
Retained Earnings Statement
For the years ending
12/31/13 | 12/31/14 | |
Retained Earnings â Beg. Balance | $3,758,000 | |
Net income | ||
Preferred dividends | ||
Common dividends | 50,000 | 50,000 |
Retained Earnings- Ending Balance |
Nelson Co.
Balance Sheet
As of
12/31/13 | 12/31/14 | |
Assets | ||
Current Assets: | ||
Cash | 300,000 | 250,000 |
Short term investments | 910,000 | 800,000 |
Account receivable | 540,000 | 410,000 |
Inventory | 990,000 | 950,000 |
Prepaid expenses | 250,000 | 210,000 |
Total current assets | ||
Long term investments | 1,800,000 | 1,900,000 |
Land Buildings Equipment | 3,240,000 | 3,466,000 |
Total Assets | ||
Liabilities | ||
Current Liabilities: | 979,000 | 780,000 |
Long term Liabilities: | ||
Mortgage Payable 8% due 2025 | 200,000 | 90,000 |
Bonds payable $5 | 1,400,000 | 1,300,000 |
Total Liabilities | ||
Shareholdersâ Equity | ||
Preferred stock $10 par 10% | 500,000 | 500,000 |
Common Stock, $5 par | 400,000 | 400,000 |
Retained Earning | ||
Total shareholdersâ equity | ||
Total Liabilities & shareholdersâ equity |
Fill in the blanks on the financial statements.
. In a one-page memo, provide an explanation to the managementteam on July's financial performance. Please provide a one-pageexplanation. Thanks in advance
Ajayi Art Inc. | ||||
Trial Balance | ||||
Account Title& Explaination | Amt (Dr) | Amt (Cr) | ||
Cash | $ 2,48,525 | |||
AccountsReceivable | $ 2,400 | |||
Prepaid Rent | $ 2,000 | |||
OfficeEquipment | $ 22,250 | |||
Art Supplies | $ 8,790 | |||
AccumulatedDepreciation | $ 371 | |||
AccountsPayable | $ 6,800 | |||
SalaryPayable | $ 3,800 | |||
InterestPayable | $185 | |||
ServiceRevenue | $ 4,300 | |||
UneanedRevenue | $ 3,500 | |||
Common Stock | $ 2,50,000 | |||
Note Payable | $ 22,250 | |||
SalaryExpenses | $ 3,800 | |||
Misc OfficeExpenses | $ 375 | |||
DepreciationExpenses | $ 371 | |||
Rent | $ 1,000 | |||
InterestExpenses | $ 185 | |||
SuppliesExpenses | $ 1,510 | |||
Total | $ 2,91,206 | $ 2,91,206 | ||
Ajayi Art Inc. | ||||
Income Statement | - | |||
Service Revenue | $ 4,300.00 | |||
Expenses | ||||
Salary Expenses | $ 3,800.00 | |||
Supplies Expenses | $ 1,510.00 | |||
Rent Expenses | $ 1,000.00 | |||
Interest Expenses | $ 185.42 | |||
Depreciation | $ 370.83 | |||
Misc.Office Expenses | $ 375.00 | |||
Total Expenses=(B) | $ 7,241.25 | |||
Net Income(A)-(B) | $ -2,941.25 | |||
Ajayi Art Inc. | ||||
Statement of Owner'sEquity | ||||
July 31st | ||||
Beginning RetainedEarnings | 0 | |||
Add: Net Income | $ (2,941.25) | |||
Ending Retained Earnings | $ (2,941.25) | |||
Ajayi Art Inc. | ||||
Balance Sheet | ||||
July 31st | ||||
Assets | ||||
Cash | $ 2,48,525.00 | |||
Accounts Receivable | $ 2,400.00 | |||
Art Supplies | $ 8,790.00 | |||
Prepaid Rent | $ 2,000.00 | |||
Office Equipment | $ 22,250.00 | |||
AccumulatedDepreciation-Office Equipment | $ -370.83 | |||
Total Assets | $ 2,83,594.17 | |||
Liabilities &Stockholder's equity | ||||
Liabilities | ||||
Accounts Payable | $ 6,800.00 | |||
Salary Payable | $ 3,800.00 | |||
Interest Payable | $ 185.42 | |||
Unearned Service Revenue | $ 3,500.00 | |||
Note Payable | $ 22,250.00 | |||
Total Liabilities | $ 36,535.42 | |||
Stockholder's Equity | ||||
Common Stock | $ 2,50,000.00 | |||
Retained Earnings | $ (2,941.25) | |||
Total Equity | $ 2,47,058.75 | |||
Total Liabilities &Stockholder's Equity | $ 2,83,594.17 |