Tri Fecta had revenues of 360,000 in its first year of operations. The company had not collected on 35,000 of its sales and still owes $40,000 on $150,000 of merchandise it purchased. The company had no inventory on hand at the end of the year. The company paid 25,000in salaries. Owners invested $40,000 in its business and 25,000 was borrowed on a five-year note. The company paid $3,000 in interest that was the amount owed for the year, and paid $8000 for a two-year insurance policy on the first day of business. Compute net income for the first year of company. Compute the cash balance at the end of the first year for Tri Fecta
Tri Fecta had revenues of 360,000 in its first year of operations. The company had not collected on 35,000 of its sales and still owes $40,000 on $150,000 of merchandise it purchased. The company had no inventory on hand at the end of the year. The company paid 25,000in salaries. Owners invested $40,000 in its business and 25,000 was borrowed on a five-year note. The company paid $3,000 in interest that was the amount owed for the year, and paid $8000 for a two-year insurance policy on the first day of business. Compute net income for the first year of company. Compute the cash balance at the end of the first year for Tri Fecta
Related questions
McGuire Corporation began operations in 2018. The company purchases computer equipment from manufacturers and then sells to retail stores. During 2018, the bookkeeper used a check register to record all cash receipts and cash disbursements. No other journals were used. The following is a recap of the cash receipts and disbursements made during the year.
| Cash receipts: | |||
| Sale of common stock | $ | 50,000 | |
| Collections from customers | 320,000 | ||
| Borrowed from local bank on April 1, note signed requiring | |||
| principal and interest at 12% to be paid on March 31, 2019 | 40,000 | ||
| Total cash receipts | $ | 410,000 | |
| Cash disbursements: | |||
| Purchase of merchandise | $ | 220,000 | |
| Payment of salaries and wages | 80,000 | ||
| Purchase of office equipment | 30,000 | ||
| Payment of rent on building | 14,000 | ||
| Miscellaneous expenses | 10,000 | ||
| Total cash disbursements | $ | 354,000 | |
You are called in to prepare financial statements at December 31, 2018. The following additional information was provided to you:
Customers owed the company $22,000 at year-end.
At year-end, $30,000 was still due to suppliers of merchandise purchased on credit.
At year-end, merchandise inventory costing $50,000 still remained on hand.
Salaries and wages owed to employees at year-end amounted to $5,000.
On December 1, $3,000 in rent was paid to the owner of the building used by McGuire. This represented rent for the months of December through February.
The office equipment, which has a 10-year life and no salvage value, was purchased on January 1, 2018. Straight-line depreciation is used.
Required:
Prepare the income statement for 2018 and a balance sheet as of December 31, 2018.
