Question

3. The End of the Accounting Cycle – prepare the financial statements (7pts): The adjusted trial balance for Scoops Ahoy, Inc. as of July, 2020 is given below:

Scoops Ahoy
Adjusted Trial Balance
As of 7/31/2020
Account:	DEBIT:	CREDIT:
Cash	$        61,080
Accounts Receivable	$        59,111
Inventory	$        50,354
Equipment	$        90,240
Accumulated Depreciation - Equipment		$        9,024
Land	$        11,440
Goodwill	$        68,707
Accounts Payable		$      44,819
Wages Payable		$        8,420
Utilities Payable		$           930
Interest Payable		$           820
Notes Payable		$      95,000
Common Stock		$        6,530
Additional Paid-In Capital		$      38,648
Retained Earnings		$    119,399
Sales Revenue		$    179,817
Cost of Goods Sold (COGS)	$        84,524
Wages Expense	$        65,107
Utilities Expense	$          1,980
Interest Expense	$             820
Depreciation Expense	$          4,512
Rent Expense	$          5,044
Dividends	$             488
	$      503,407	$    503,407

Using the adjusted trial balance provided above for Scoops Ahoy, prepare the following financial statements for July:

PART A (3pts): Income statement for the period ended July 31^st, 2020.

PART B (4pts): Classified balance sheet as of July 31^st, 2020.   Assume during 2020 no additional stock was issued and $488 in dividends were declared and paid in cash.

Answer 1

Income Statement
Sales Revenue		$      179,817
Cost of Goods Sold		$        84,524
Gross Profit		$        95,293
Operating Expenses
Wages Expense	$        65,107
Utilities Expense	$          1,980
Depreciation Expense	$          4,512
Rent Expense	$          5,044
Total Operating Expenses		$        76,643
Net Operating Income		$        18,650
Interest Expense		$             820
Net Income		$        17,830

Statement of Retained Earnings
Beginning Balance	$      119,399
Add : Net Income	$        17,830
	$      137,229
Less : Dividend	$             488
Ending Balance	$     136,741

Balance Sheet
Assets
Current Assets
Cash	$        61,080
Accounts Receivable	$        59,111
Inventory	$        50,354
Total Current Assets		$     170,545
Property, Plant and Equipment
Land	$        11,440
Equipment	$        90,240
Less : Accumulated Depreciation	$         (9,024)
Total Property, Plant and Equipment		$        92,656
Intangible Assets
Goodwill		$        68,707
Total Assets		$     331,908
Liabilities & Stockholder's Equity
Current Liabilities
Accounts Payable	$        44,819
Wages Payable	$          8,420
Utilities Payable	$             930
Interest Payable	$             820
Total Current Liabilities		$        54,989
Long term Liabilities
Notes Payable		$        95,000
Total Liabilities		$     149,989
Stockholder's Equity
Common Stock	$          6,530
Additional Paid-in Capital	$        38,648
Retained Earnings	$      136,741
Total Stockholder's Equity		$     181,919
Total Liabilities & Stockholder's Equity		$     331,908

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