Question

SHERMAN EQUIPMENT CO Income Statement For the Year Ending December 31, Year 2 7 8 10 Gross Margin Operating Expenses 11 12 13 14 15 Total Operating Expenses Operating Income Non-Operating Items 16 17 18 19 20 Net Income 21 22 SHERMAN EQUIPMENT CO. 23 Balance Sheet 24 25 As of December 31, Year 2 26 27 Assets Assets 28 29 30 31 32 33 34 35 36 37 38 Total Assets 39 Liabilities and Stockholders Equity 40 41 Current Liabilities 42 43 Total Liabilities 44 45 Stockholders Equity 46 47 48 Total Stockholders Equity 49 Total Liabities and Stekholders Equity 50 51 52 53 PO7-21A Given PO7-21A P07.24A

Answer 1

	Sherman Equipment Company
	Income Statement
	For the Year ended December 31st,Year 2
	Sales Revenue=(A)		$        3,20,000.00
	Cost of goods sold=(B)		$        1,48,000.00
	Gross Margin=(C )=(A)-(B)		$        1,72,000.00
	Operating Expenses
	Salaries Expense	$           69,000.00
	Operating Expense	$           62,000.00
	Uncollectible Accounts Expense	$             8,100.00
	Total Operating Expenses=(D )		$        1,39,100.00
	Operating Income=( E )=(C )-(D )		$           32,900.00
	Non Operating Items
	Interest Revenue=(F )		$              5,400.00
	Net Income=(E )+(F)		$           38,300.00
	Sherman Equipment Company
	Balance Sheet
	For the Year ended December 31st,Year 2
	Assets
	Cash		$           48,100.00
	Accounts Receivable	$           56,000.00
	less: Allowance for doubtful accounts	$           (7,800.00)	$           48,200.00
	Inventory		$           98,300.00
	Interest Receivable		$              1,500.00
	Prepaid Rent		$           12,500.00
	Supplies		$              1,200.00
	Note Receivable		$           24,000.00
	Land		$           40,000.00
	Total Assets			$                     2,73,800.00
	Liabilities & Stockholder's Equity
	Accounts Payable		$           46,000.00
	Salaries Payable		$           12,000.00
	Total Current Liabilities			$                         58,000.00
	Stockholder's Equity
	Common Stock		$        1,00,000.00
*	Retained Earnings		$        1,15,800.00
	Total Stock holder's Equity			$                     2,15,800.00
	Total Liabilities and stockholder's equity			$                     2,73,800.00
	Retained Earnings
*	Beginning Retained Earnings	$           81,000.00
	Add: Net Income	$           38,300.00
	Less: Dividend	$            -3,500.00
	Ending Retained Earnings	$       1,15,800.00