Prepare the Income Statement, Statement of Ownersâ Equity and the Balance Sheet for the fiscal year ending September 30, 2017. To support your work prepare the appropriate journal entries and post to the related Accounting Equation or âT-accounts".
The attached Balance Sheet gives your firm's position at the end of fiscal 2016. During fiscal 2017, your firm has the following transactions:
Your firm has total sales for the year of $1,210,500. Included in the total sales figure are $1,010,500 sales on credit. During the year, the firm received $792,000 of payments on account. Customers returned $7,800 for cash refunds during the year.
During the year, the firm determined that accounts totaling $2,900 were uncollectible. Moreover, a $375 receivable written off during the year was subsequently collected. The $375 is not included in âA.â above.
Your firm uses the allowance method to record bad debts. Specifically, the firm uses the percentage of receivables method to compute the allowance for doubtful accounts. The firm uses the following information to determine the allowance:
Age of Receivables
Percent of current balance
Percent expected uncollectible
<30 days
70%
2%
< 60 days
23%
10%
>60 days
7%
50%
Your Firm
Balance Sheet
September 30, 2016
Assets
Cash
$ 102,530
Accounts receivable
$ 101,640
Allowance for doubtful accounts
(6,160)
Accounts receivable, net
95,480
Inventories
136,400
Trading securities
111,100
Prepaid insurance
17,100
Total Current Assets
462,610
Property, Plant and Equipment, gross
$ 1,633,500
Accumulated depreciation
(546,975)
Property, Plant and Equipment, net
1,086,525
Total Assets
$ 1,549,135
Liabilities and Shareholders' Equity
Accounts payable
$ 89,645
Salaries payable
31,575
Dividends payable
4,400
Total Current Liabilities
125,620
Long-term note payable
380,000
Total Liabilities
505,620
Common stock, no par
490,000
Retained Earnings
591,215
Accumulated Other Comprehensive Income
4,300
Treasury stock
(42,000)
Total Shareholder's Equity
1,043,515
Total Liabilities and Shareholder's Equity
$ 1,549,135
Prepare the Income Statement, Statement of Ownersâ Equity and the Balance Sheet for the fiscal year ending September 30, 2017. To support your work prepare the appropriate journal entries and post to the related Accounting Equation or âT-accounts".
The attached Balance Sheet gives your firm's position at the end of fiscal 2016. During fiscal 2017, your firm has the following transactions:
Your firm has total sales for the year of $1,210,500. Included in the total sales figure are $1,010,500 sales on credit. During the year, the firm received $792,000 of payments on account. Customers returned $7,800 for cash refunds during the year.
During the year, the firm determined that accounts totaling $2,900 were uncollectible. Moreover, a $375 receivable written off during the year was subsequently collected. The $375 is not included in âA.â above.
Your firm uses the allowance method to record bad debts. Specifically, the firm uses the percentage of receivables method to compute the allowance for doubtful accounts. The firm uses the following information to determine the allowance:
Age of Receivables | Percent of current balance | Percent expected uncollectible |
<30 days | 70% | 2% |
< 60 days | 23% | 10% |
>60 days | 7% | 50% |
Your Firm | |||
Balance Sheet | |||
September 30, 2016 | |||
Assets | |||
Cash | $ 102,530 | ||
Accounts receivable | $ 101,640 | ||
Allowance for doubtful accounts | (6,160) | ||
Accounts receivable, net | 95,480 | ||
Inventories | 136,400 | ||
Trading securities | 111,100 | ||
Prepaid insurance | 17,100 | ||
Total Current Assets | 462,610 | ||
Property, Plant and Equipment, gross | $ 1,633,500 | ||
Accumulated depreciation | (546,975) | ||
Property, Plant and Equipment, net | 1,086,525 | ||
Total Assets | $ 1,549,135 | ||
Liabilities and Shareholders' Equity | |||
Accounts payable | $ 89,645 | ||
Salaries payable | 31,575 | ||
Dividends payable | 4,400 | ||
Total Current Liabilities | 125,620 | ||
Long-term note payable | 380,000 | ||
Total Liabilities | 505,620 | ||
Common stock, no par | 490,000 | ||
Retained Earnings | 591,215 | ||
Accumulated Other Comprehensive Income | 4,300 | ||
Treasury stock | (42,000) | ||
Total Shareholder's Equity | 1,043,515 | ||
Total Liabilities and Shareholder's Equity | $ 1,549,135 |