Question

5. On January 1" 2018, Mary Rodrigues, the accountant for 3D Printing Inc., sat down to prepare the 2017 financial statements for her employer. The company was started on January 1, 2014 This business operates by producing 3D printed parts for customers either from CAD files the customer has provided them or by having the customer work with one of their engineers to design the part. The Balance Sheet as of December 31, 2016 reads as follows. Current Assets: Cash Accounts Receivable Inventory (plastic) Inventory (finished goods) $80,000 $10,000 $8,000 $1,000 Fixed Assets: 3D Printers $26,000 Total Assets: $125,000 Current Liabilities: Material Account Payable $5,000 Fixed Liabilities: Bank Loan Outstanding $10,000 Total Equity $110,000 Total Equity and Liabilities: $125,000 After gathering all the receipts, payment slips and bank statements, Mary was able to make the following list of cash receipts and disbursements: Receipts: Sales: $600,000 Disbursements: Plastic: $50,000 Wages (Manufacturing): $100,000 Wages (Engineering): $150,000 Wages (Admin/Sales): $40,000 Bank Payment: $3,000 Building rent & utilities: $10,000 Additionally, 3D Printing Inc.'s customers owed them $6,000 at the end of the year and they owed their plastic suppliers $12,000. Page 5 of seven pages

please do calculations by hand

Answer 1

3D Printing Inc
Depreciation Calculation as per Books
Year	Transaction	Amount	Remark
01.01.2014	Purchase of Printers	$25,000	5 nos @ $5000
31.12.2014	Less:Depreciation	5,000	(25000/5) as life is 5 years
		$20,000
31.12.2015	Less:Depreciation	5,000	(25000/5) as life is 5 years
		$15,000
01.01.2016	Purchase of Printers	$20,000	5 nos @ $4000
31.12.2016	Less:Depreciation	9000	(25000/5) as life is 5 years + (20000/4) as life is 5 years
Balance as on 31.12.2016		$26,000
31.12.2017	Less:Depreciation	9000	(25000/5) as life is 5 years + (20000/4) as life is 5 years
		$17,000

Depreciation Calculation for Tax Purpose
Year	Transaction	Amount	Remark
01.01.2014	Purchase of Printers	$25,000	5 nos @ $5000
31.12.2014	Less:Depreciation @40%	10,000
		$15,000
31.12.2015	Less:Depreciation @40%	6,000
		$9,000
01.01.2016	Purchase of Printers	$20,000	5 nos @ $4000
		$29,000
31.12.2016	Less:Depreciation @40%	$11,600
Balance as on 31.12.2016		$17,400
31.12.2017	Less:Depreciation @40%	$6,960
		$10,440

Working of Cost of Goods Sold
Opening Stock	9,000	(8000 Plastic + 1000 finished goods)
Add: Purchases	62,000	(50000 purchase + 12000 payable)
Less: Closing Stock	5,920	(see workings below)
Cost of Good Sold	65,080
Working of Closing Stock
Finished good contains			$
6 hours of Engineering design work of $30 per hour			180
12 hours of manufacturing hours at $ 15 per hour			180
3 hours of Sales and admin hours at $20 per hour			60
Plastic material worth $1500			1500
Total Cost of Finished Part			1920
Add: Plastic Material			4000
Total Closing Stock			5920

3D Printing Inc
Income Statement for
Year Ended December 31,2017
Particulars	Amount
Net Sales Revenue	6,06,000
Cost of Goods Sold	65,080
Gross Profit	5,40,920
Wages( Manufacturing)	1,00,000
Wages( Engineering)	1,50,000
Depreciation on Printer	9,000
Operating Expenses	2,59,000
Other Expenses
Wages (Admin /Sales)	40,000
Bank Interest	500
Building Rent & Utilities	10,000
Total Other Expenses	50,500
Net Income	2,08,500
3D Printing Inc
Balance Sheet
December 31,2017
Particulars	Amount
Current Assets
Cash	3,09,080
Accounts Receivable	6,000
Inventory (plastic)	4,000
Inventory (finished goods)	1,920
Fixed Assets
3D Printers	17,000
Total Assets	3,38,000
Current Liabilities
Material Account Payable	12,000
Fixed Liabilities
Bank Loan outstanding	7,500	( Total bank payment 3000 less Interest 500, So 2500 repaid)
Total Liabilities	19,500
Equity	1,10,000
Retained Earning	2,08,500
Total Liabilities and Stockholders' Equity	3,38,000