Question

The last person who answered this made the t accounts look really confusing so I wasn't sure how to go about analyzing them.

The t-accounts on page 2 show account balances as of January 1, 2018 for Honeydukes Sweet Shop. Listed below is a summary of the company's transactions for 2018, as well as other information about account balances. 1. Retail sales for the year totaled $1,800. $1,200 was received in cash and $600 was on account. 2. Purchased $1,340 of inventory on account. 3. Made payments to suppliers (for inventory previously purchased on account) in the amount of $1,352. 4. Collected $604 on accounts receivable. 5. Made payments of $220 for miscellaneous expenses. 6. Paid wages to employees during the year totaling $155. The beginning balance in Wages Payable is the amount of wages employees earned in December 2017, which were paid in January 2018. 7. On April 1st Honeydukes obtained a loan for $150 from a local bank, payable at the end of two years with semi-annual interest payments at an annual rate of 8%. 8. Made a semi-annual interest payment of $6 to the bank on September 30, 2018 (see part 7). 9. Dividends of $60 were declared on December 15, 2018. The dividends will be paid to common stockholders on January 8, 2019. Other information as of December 31, 2018: • Inventories on hand at December 31, 2018 were $160. • Depreciation expense for the year was $24. • Wages of $19 were earned by employees during December 2018 but will be paid in January 2019. • The next semi-annual interest payment will be made on March 31, 2019. • You may ignore income taxes.

Answer 1

Answer:

Acc. Depreciation Cash 53 1200 604 Account receivable 604 600 PP&E 250 Inventory 157 1337 1340 1352 220 155 55 Account payable 1352 1340 150 16 43 6 258 160 250 FAH RAH 4AH Sales revenue Retained earnings 60 143 36 Wages payable 16 Common stock 200 Misc Expense 220 1800 Wages Expense 155 19 119 1800 200 220 174 Notes payable Interest Expense Interest payable Dividend payable 60 Cost of goods sold 1337 Depreciation Expense 24 150 w 1337 24 150 w

Honeydukes Sweet Shop Income Statement For the year ending December 31, 2018 Revenue: $ Sales revenue Less: Cost of good sold $ 1,800 1,337 463) Less: Expenses: Misc expense Wages expense Interest expense Depreciation expense 220 174 427 Net Income 36

Assets Current Assets: Cash Account receivable Inventory Honeydukes Sweet Shop BALANCE SHEET For year ending December 31, 2018 $ Liabilities & Stockholder's Equity Current Liabilities: 258 Account payable Wages payable 160 Notes payable Dividend payable Interest payable st payable 428 Total Current Liabilities 150 3. Total Current Assets 275 Non-current Assets: PP&E Less: Accumulated depreciation 250 Stockholder's Equity: Common stock 166 Retained earning 200 119 84 319 Total Assets 594 Total Liabilities & Stockholder's Equity 594