Question

ABC Co. Sales were $210,000 before a $10,000 cash return. Depreciation expense was $10,000. Salary Expense was $5,000. Rent Expense was $5,000. Retained earnings had a beginning of the year balance of $25,000. Dividends paid were $5,000. Other balances include: Cash ending balance $50,000; Accounts Receivable ending balance of $80,000; Accumulated depreciation had a $40,000 ending balance; allowance for doubtful accounts had an ending $20,000 balance. Supplies had a beginning balance of $50,000, purchases during the year of $140,000, and an ending balance of $40,000; Equipment had a cost ending balance of $100,000. Land had an ending balance of $40,000. Unearned revenue a $50,000 ending balance; common stock a $150,000 ending balance. Prepare 12/31/2018 balance sheet and income statement (multi-step) for ABC in good form

Answer 1

	INCOME STATEMENT
	IN MULTIPLE STEP FORM
	Particulars	Amount	Amount
	Sales Revenue	$     2,10,000
	Less: Sales ReturnS	$         10,000
			$    2,00,000
	Less : Cost of Goods Sold
	Beginning Inventory	$         50,000
	Add: Purchase	$     1,40,000
	Less: Ending inventory	$         40,000
			$    1,50,000
	Gross Profit		$        50,000
	Less : Operating Expenses
	Depreciation Expenses	$         10,000
	Salary expenses	$           5,000
	Rent Expeses	$           5,000
			$        20,000
	Operating Income		$        30,000
	RETAINED EARNING STATEMENT
	Beginning balance	$         25,000
	Add: Operating income	$         30,000
	Less: Dividend paid	$           5,000
	Ending balance	$         50,000
	BALANCE SHEET
	ASSETS	AMOUNT	AMOUNT	LIABILITIES & SHAREHOLDER'S EQUITY	AMOUNT	AMOUNT
	CURRENT ASSETS:			CURRENT LIABILITIES:
	Cash	$         50,000		Unearned Revenue	$     50,000
	Account receivable                                        $ 80,000
	Less: Allowance for doub. Debts              $ 20,000	$         60,000
	Merchandise Inventory	$         40,000				$      50,000
	FIXED ASSETS:		$    1,50,000
	Land	$         40,000
	Equipment                                                   $ 100,000			Owner's Equity
	Less: Depreciation                                       $ 40,000	$         60,000		Common Stock	$ 1,50,000
				Retained Earning	$     50,000
			$    1,00,000
						$ 2,00,000
	TOTAL OF ASSETS		$    2,50,000	TOTAL OF LIABILITES & SAHREHOLDER'S EQUITY		$ 2,50,000