Question

On October 1, 2017 – An investor purchased 20 shares of stock (100%) from ABC Co. for $800,000 CASH. The par value of the stock was $5,000/share. ABC Company purchased equipment for $90,000; paying $40,000 and financing (through a long-term note) the remaining portion. ABC had the following transactions after 10/1/2017: Sold and delivered services for $320,000. $80,000 of cash was received immediately and the remaining amounts will be received in 2018 ABC was given in cash $10,000 for future services. The services are to be provided to the client in 2018. ABC paid $5,000 for advertising. The advertising was already displayed and incurred. ABC paid $10,000 for miscellaneous supplies. Cash was paid for both. Paid salaries in total of $20,000 for work already done. ABC received a bill for the utilities it had used this past month in the amount of $6,000. ABC declared and paid a dividend of $2,000. The tax rate is 20% but the tax will not be paid until 2018. Prepare a balance sheet and Income Statement in good form for the year-ended 2017 for ABC Co.

Answer 1

(A) - ARC (a Income statement for the year ended 2017 - _ 320,000 Sales Revenue Hess operating experses advertising miscellaneous Supplies Salaries Stilities exponses 000 19000 2000D Totolas operating expenses 41000 operating Income 279000 less tax payablet (588) Net Income 223200 less Dividend paid 2060 Retained Earning 22/200 palance sheet al on 2017 uabbles B Lossers & cunah liabiliter cement Asset Tax payable SS800 Account Receivable 240000 etilities payable Goool cash cW.M 813000 7 Uneamed Revenue 10,oool Long term note 59000 stockholdess Equiry shove stock 5000 Fixed Assot Addition share stock 795000 Equipment 90,000 - Retained Earning 221,200 1,143000 1148000 cash all to non stock 15000 By shona Staste Toa edition shen stock 795000 by Equipment to sales Revenue 80,ooo by advertising Toonearmed revenue 10,000 hymis supplies by salaria by dividend by balance ald 40,000 sooo - 10,000 20,000 2000 813000) 990000