Question

1. Company x had a beginning inventory of at December 31, 2019 valued at $ 811,000 purchased with a 6 month note at 6% due May 2020. The company had a number of purchases during the NEW year equal to $352,000. The ending inventory count indicated 60 units valued at $493,100. Assume Sales for the year was $1,105,000 and the tax rate was 23%. Assume General Administration expenses for the year were $ 61,000. The company had an extraordinary gain of 49,000. The company paid cash for a warehouse $30,000 (10 yr) 10% salvage and two taxis for a total of $34,000 (0 sal) Both used str-line for book income and sum of the years digits for tax able income Prepare an Income Statement and Balance Sheet in good form for the X Company.2020 Assume that there are 350,000 COMMON shares outstanding at year-end, 85,000 shares were issued April 15, valued at $12/shs and 100,000 were issued on September 30 valued at $14/shs. The beginning balance was valuet$10 per share. There were 5,000 preferred shareholders who contributed $2,000,000 to earn 8% per year. The preferred stock is non cumulative and non participating..

Answer 1

Income statement				Cost of goods sold
sales		1105000		beginning inventory	811000
cost of goods sold		669900		purchases	352000
gross profit		435100		less year end inventory	493100
general administration expenses		61000		Cost of goods sold	669900
depreciation expense-warehouse =(30000-3000)/10		2700
depreciation expense-Taxis =34000/10		3400
operating profit		368000
interest expense	811000*6%*6/12	24330
before tax profit		343670
less taxes-23%		79044.1
net income		264625.9
Balance Sheet
Assets
Current assets
cash	7966725.9-493100	7473625.9
inventory		493100
total of current liabilities	8024625.9-27300-30600		7966725.9
warehouse net of accumulated depreciation			27300
taxis net of accumulated depreciation			30600
total of assets			8024625.9
Liabilities and shareholders equity
Liabilities
total of liabilities			0
Shareholders equity
common stock		5350000
preferred stock		2000000
additional paid in capital-common stock		570000
retained earning		104625.9
total of shareholders equity			8024625.9
total of liabilities and shareholders equity			8024625.9
statement of retained earning
beginning balance		0
net income		264625.9
less preferred dividend	2000000*8%	160000
year end balance		104625.9