Question

Using the worksheets that follow this one, prepare in good form: (read notes at bottom also) 2018 Year-End Financial Statements for Botswana Tea Company, Inc. 1.) Multi-step Income Statement Instructions: 2.) Classified Balance Sheet 3.) Statement of Retained Earnings

Answer 1

Answer-1 In the books of Botswana Tea Company Inc. Income Statement for the year ended 2018 Amount (in $) Amount (in $) Revenues Sales Revenue 3,95,000 Less: Cost of goods sold 2,45,520 1,49,480 Other Revenue 12,630 Rent revenue Gain on disposition of plant asset 28,465 Total Revenues 1,90,575 Less: Operating expenses Wages & salaries-selling Wages & salaries-office Supplies expense utilities expense Sales discount Office rentexpen se Insurance expense Interest expense 30,000 44,800 600 2,200 12,140 6,400 1,200 1,100 Depreciation expen se- building Depreciation expen se-store equipment Discount on bo nds psysble Amortisation expense Bad debt expense Total Expenses 13,500 6,000 10,000 725 3,600 1,32,265 Operating Income Add: Gain/Loss from discontinued operations Net income from discontinued opeartion Less: loss on disposal of discontinued operation Net income from disconti 58,310 18,500 6,200 Opeartions 12,300 Total income Less: Income tax expenses 70,610 19,300 Net income 51,310

Answer -2 In the books of Botswana Tea Company Inc. Balance Sheet as at 2018 Amount (in S) Amount (in $) Assets Current Assets Accounts Rece ivable Less: Allowance for doubtful debts Net Accounts receivable 31,250 -4,020 27,230 Cash Surrender value of life insuranc Merchandise Inventory Supplies Prepaid insurance Bank overdre aft 15,000 16,800 440 800 -2,500 Cash 36,780 Total Current Assets 94,550 Fixed Assets Tangible Assets- Land Land held for future use 60,000 14,050 Building Accumulated de p-build ing Net Building 3,48,000 -2,52,600 95,400 Store eqiipment Accumulated dep-store equipment Net Store eqiipment 1,62,500 -25,500 1,37,000 Intangible Asstes Goodwill 28,000 Patenets 7,600 Total fixed Assets 3,42,050 Total Assets 4,36,600 Liabilities Current liabilities Accounts payable bonds payable Interest payable Notes payable, due on june 15,2019 4,400 1,30,000 200 10,000 Unearned revenue 15,000 Total 1,59,600 Long term Liabilities Notes payable, dueon may 20,2020 25,000 Stockholders equity Common stock $2 par Paid in capital in excess of par Retained eamings- Opening ba lance Add: net income 1,35,400 40,600 49,690 51,310 -25,000 Less: dividend Net retained earnings Total Stockholders equity 76,000 2,52,000 Total liabilities 4,36,600 3. Statement of retained eamings Particulars Retained eamings- Opening balance Add: net income Amount in $ 49,690 51,310 Less: dividend Net retained earnings -25,000 76,000