Question

Financial Statement worksheet (Journal Entries, T-Accounts, Adjusted Trial Balance, Income statement, Retained Earnings, Balance Sheet and following questions)

42.000 Financial Statement Homework #2 Name Gold Inc December 31, 2015 Unadjusted Trial balance Cash 44.000 Accounts Receivable 22.000 Allowance for Doubtful Accounts Short Term Note Receivable 50.000 Interest Receivable Supplies on Hand 5.000 Prepaid Insurance 48,000 Inventory 10.000 Vehicle 16,000 Equipment 75,000 Accumulated Depreciation Accounts Payable Unearned Revenue Wages Payable Long-Term Notes Payable Common Stock Retained Earnings (1/1/2015) Dividends 2,000 Sales Sales Discounts 10,000 Cost of Goods Sold 48,000 Delivery Expense 5,000 Depreciation Expense 16.000 Bad Debt Expense Rent Expense 98.000 Insurance Expense 25,000 Wages Expense 195,000 Supplies Expense 16,000 Interest Revenue Loss on Disposal Interest Expense 6,500 Income Tax Expense 36,000 Total 727,500 14.000 2,000 45,000 106,000 2,500 503,500 727,500 Page 1 of 8

Answer 1

Gold Inc. Adjusting Enteries Date Particulars 31.12.2015 Accounts Receivable a/c To Sales (Sales on account) Dr. Debit in $ Credit in $ 14500 14500 4500 Cost of goods sold a/c Dr. To Inventory (To record cost of goods sold) 4500 1250 31.12.2015 Interest Receivable a/c Dr. To Interest Revenue (Interest accrued) 50000 x 10% x 3/12 = 1250 1250 500 900 31.12.2015 Allowance for Doubtful accounts Dr. Bad Debts Expense a/c Dr. To Accounts Receivable (Uncollectibles written off) 1400 560 31.12.2015 Bad Debts Expense a/c Dr. To Allowance for Doubtful accounts (To record bad debts) 560 2000 31.12.2015 Depreciation Expense a/c Dr. To Accumulated Depreciation (To record depreciation) 2000 Dr. Dr. 26000 4000 31.12.2015 Accumulated Depreciation a/c Loss on Disposal a/c To Equipment (Equipment retired) 30000

Adjusted Trial Balance For the period ending 31.12.2015 560 Particulars Cash Accounts Receivable Allowance for Doubtful accounts Short Term Note Receivable Interest Receivable Supplies on Hand Prepaid Insurance Inventory Vehicle Equipment Accumulated Depreciation Accounts Payable Unearned Revenue Wages Payable Long Term Notes Payable Common Stock Retained Earnings 1.1.2015 Dividends Sales Sales Discount Cost of goods sold Delivery Expense Depreciation Expense Bad Debts Expense Rent Expense Insurance Expense Wages Expense Supplies Expense Interest Revenue Loss on Disposal Interest Expense Income Tax Expense Totals Unadjusted Adjustments Adjusted Debit in $ Credit in $ Debit in $ Credit in $ Debit in $ Credit in $ 44000 44000 22000 14500 1400 35100 500 500 560 50000 50000 1250 1250 5000 5000 48000 48000 10000 4500 5500 16000 16000 75000 30000 45000 42000 26000 2000 18000 12000 12000 14000 14000 2000 2000 45000 45000 106000 106000 2500 2500 2000 2000 503500 14500 518000 10000 10000 48000 4500 52500 5000 5000 16000 2000 18000 1460 1460 98000 98000 25000 25000 195000 195000 16000 16000 1250 1250 4000 4000 6500 6500 36000 36000 727500 727500 54210 54210 719310 719310

518000 -10000 508000 -52500 455500 Statement of Income For the period ending 31.12.2015 Sales Sales Discount Net Sales Cost of goods sold Gross Margin Operating Expenses : Delivery Expense 5000 Depreciation Expense 18000 Bad Debts Expense 1460 Rent Expense 98000 Insurance Expense 25000 Wages Expense 195000 Supplies Expense 16000 Operating Income Non Operating Items: Interest Revenue 1250 Loss on Disposal -4000 Interest Expense -6500 Income before income tax Income Tax Expense Net Income 358460 97040 -9250 87790 -36000 51790 Statement of Retained Earnings For the period ending 31.12.2015 Balance as at 1.1.2015 2500 Net Income 51790 54290 Dividends -2000 52290

Amounts in $ Amounts in $ Balance sheet As at 31.12.2015 Assets Current Assets Cash Accounts Receivable Allowance for Doubtful accounts Short Term Note Receivable Interest Receivable Supplies on Hand Prepaid Insurance Inventory 12000 14000 2000 28000 Amounts in $ Amounts in $ Liabilities Current Liabilities 44000 Accounts Payable 35100 Unearned Revenue -560 Wages Payable 50000 1250 Non Current Liabilities 5000 Long Term Notes Payable 48000 5500 188290 45000 Non Current Assets Vehicle Equipment Accumulated Depreciation Total Assets 16000 45000 - 18000 Shareholders Equity Common Stock 43000 Retained Earnings 31.12.2015 231290 Total Liabilities & Equity 106000 52290 158290 231290 Gross Profit = 455500 Operating Income = 97040 Income before income tax = 87790 Total Current Assets = 188290 Total Current Liabilities = 28000 Net PPE = 43000 If depreciation expense is omitted Net Income would increase by 2000 Assets would increase by 2000 and Retained Earnings would increase by 2000