Question

$56,359 12,900 50,000 22,340 6,000 1,450 1,450 $ 61,608 28,252 650 111,760 Accounts Receivable Advertising Expense Capital Stock Cash Dividends Income Tax Expense Income Tax Payable Inventory: January 1, 2017 December 31, 2017 Net purchases Retained Earnings, January 1, 2017 Salaries Payable Net sales Transportation-In Utilities Expense Wages and Salaries Expense Wages Payable 375 1,800 23,000 120 6,400 5,900

A list of accounts of Lloyd INC. at December 2017...

Required

1. Determined the cost of goods sold

2. Determine Net Income for 2017

3. Prepare a Balance Sheet dated December 31, 2017

4. Calculate Inventory Turnover Ratio, Days to sell inventory, and the cash paid to purchase inventory

Answer 1

1.
Cost of goods sold = Opening Inventory + Purchases + Transp In - Closing Inventory = 6,400 + 375 + 61,608 - 5,900 = $ 62,483

2.

Net Sales	$         111,760
COGS	$           62,483
Gross Profit	$           49,277
Expenses
Advertising Expense	$           12,900
Utilities Expense	$              1,800
Wages and salaries expense	$           23,000
Total expense	$           37,700
Income before taxes	$           11,577
Income tax expense	$              1,450
Net Income	$           10,127

3.

Asset
Cash	$           22,340
Accounts Receivable	$           56,359
Inventory	$              5,900
Total Current Assets	$           84,599
Liabilities
Income tax payable	$              1,450
Wages payable	$                 120
Salaries payable	$                 650
Total Liabilities	$              2,220
Equity
Capital Stock	$           50,000
Retained Earnings	$           32,379
Total Equity	$           82,379
Total Equity and Liabilities	$           84,599

4.

Inventory turnover ratio = COGS / Average Inventory = 62,483 / (6,400 + 5,900) / 2 = 10.16
Days to sell = 1 / ITR X 365 = 35.93 days