Question

Iris Floral

Several years ago Iris began a floral business to have something to do in her spare time. The shop has done well and now employs several people. The trial balance at December 31, 2019 is shown below along with some additional information. Iris has asked that you use this information to prepare financial statements for her for the year ended December 31^st. I suggest you begin with a worksheet. All amounts should be to the nearest dollar.

            IRIS FLORAL

            Trial Balance

            December 31, 2019

	Debit	Credit
Cash	29,000
Notes Receivable	10,000
Interest Receivable
Accounts Receivable	7,600
Allowance for Doubtful Accounts		200
Inventory	18,000
Prepaid Insurance
Prepaid Advertising	21,000
Land	55,000
Buildings	148,000
Accumulated Depreciation-Buildings		9,750
Equipment	89,000
Accumulated Depreciation-Equipment		18,000
Short Term Note Payable		18,000
Accounts Payable		12,000
Salaries Payable
Interest Payable
Unearned Wedding Revenue		12,000
Unearned Funeral Revenue		2,000
Mortgage Payable		133,000
Capital Stock		20,000
Retained Earnings		87,950
Dividends Declared	15,000
Wedding Revenue		123,000
Funeral Revenue		54,000
Cash Sales of garden plants		178,000
Cost of Goods Sold	71,000
Salaries Expense	130,000
Insurance Expense	9,300
Advertising Expense
Depreciation Expense-Building
Depreciation Expense-Equipment
Bad Debt Expense
Other Expenses	53,000
Interest Revenue
Interest Expense	12,000
Total	667,900	667,900

Additional Information

a. The 8% Note was received from a customer on December 13th. The note matures in 60 days.

b. Each mortgage payment is due on the 20th of the month. The last payment was made in December

Answer 1

Amount $ Amounts 123,000 54,000 178,000 Income statement for period ended 31st December 2019 :- Particulars Revenue:- Wedding Revenue Funeral Revenue Cash Sales of garden plants Total Revenue Less: Cost of goods sold Gross Profit Less : Expenses Salaries Expense Insurance Expense Other Expenses Total Expenses Income before interest and tax Less: Interest expense Net Income 355,000 71,000 284,000 130,000 9,300 53,000 192,300 91,700 12,000 79,700 Retained earnings for year ended 31st December 2019 :- Particulars Beginning balance Add: Net Income Amounts 87,950 79,700 167,650 15,000 Less: Dividends Retained earnings balance, Ending 152,650

Amount $ 12,000 18,000 12,000 2,000 44,000 In the Books of IRIS FLORAL Classified statement of Financial Position as at December 31, 2019 :- Assets Amount $ Liabilities and Shareholders Equity Current Assets : Current Liabilities : Cash 29,000 Accounts Payable Short Term Note Payable Accounts Receivable 7,600 Unearned Wedding Revenue Less: Allowance for Doubtful accounts (200) Unearned Funeral Revenu Total Current Liabilities (A) Notes Receivable 10,000 Inventory 18,000 Prepaid advertising 21,000 Total Current Assets (A) 85,400 Long term Liabilities : Mortgage Payable Non-Current Assets: Total Long term Liabilities (B) Property, Plant and Equipment Land 55,000 Building 148,000 Shareholders Equity :- Less: Accumulated Depreciation - Building (9,750) Capital Stock Equipment 89,000 Retained earnings Less: Accumulated Depreciation - Equipment (18,000) Net Fixed Assets (B) 264,250 Total Shareholders Equity (C) 133,000 133,000 20,000 152,650 172,650 Total Assets (A+B) 349,650 Liabilities and Shareholders Equity (A+B+C) 349,650