Question

	COGS
X1	Inventory 1/1/2018					950000
X2	Purchases				1060000
X3	Less: Purchase Discounts				21000
	Net Purchase				1039000
X4:	Add: Freight-In				19000	1058000
	Inventory available for sale					200800
	Less: Inventory 12/31/2018					864070
	COGS Total					1143930

Rapid Roller Inc. Adjusted Trial Balance December 31, 2018 Credit $ Debit 140,000 275,000 Part A - Calculate the following (show your work). $ 22,000 10,000 23,000 1. Calculate Net Sales 2. Calculate Net Accounts Receivable 3. Calculate Shares Outstanding 950,000 1,250,000 300,000 2,000,000 Part B - Prepare the fiscal year 2018 financial statements for Rapid Roller Inc. 450,000 155,000 1. Multiple Step Income Statement 2. Retained Earnings Statement 3. Classified Balance Sheet Cash Accounts Receivable Allowance for Doubtful Accounts Notes Receivable Supplies Inventory, 1/1/18 Equipment Accumulated Deperciation - Equipment Building Accumulated Deperciation - Building Land Accounts Payable Salaries and Wages Payable Notes Payable Mortgage Payable Common Stock Par $ 0.01 APIC Retained Earnings Dividends - Common Sales Revenue Sales Discounts Sales Returns and Allowances Purchases Purchase Discounts Freight in Selling Expenses Administrative Expenses Rent Revenue Income Tax Expense Gain on Sale of Land 365,000 24,000 125,000 1,750,000 20,000 980,000 (110,000) $ 50,000 2,650,000 35,000 68,000 1,060,000 21,000 $ $ $ 19,000 195,000 245,000 26,000 $ 325,000 177,000 6,800,000 $ 6,800,000 $

Answer 1

A) Sales Revenue $2,650,000 Workings: Less: Sales Discounts -$35,000 Less: Sales Returns and Allowances $68,000 Inventory 1/1/2018 1) Net Sales $2,547,000 Purchases Less: Purchase Discounts Accounts Receivable $275,000 Net Purchase Less: Allowance for Doubtful Accounts $22,000 Add: Freight-In 2) Net Accounts Receivable $253,000 Inventory available for sale Less: Inventory 12/31/2018 Common Stock $20,000 Cost of Goods Sold (COGS) Par value per share of Common Stock $0.01 3) Number of Common Stock Outstanding 2,000,000 ($20000 / $0.01] $950,000 $1,060,000 $21,000 $1,039,000 $19,000 $1,058,000 $2,008,000 -$864,070 $1,143,930

B) $2,547,000 (Ref: Part-A1] $1,143,930 [Ref: Workings in Part-A] $1,403,070 Rapid Roller, Inc. 2) Statement of Retained Earnings For the Year Ended December 31, 2018 Retained Earnings, January 1, 2018 Add: Net Income $841,070 Less: Dividends $50,000 Net increase in retained earnings Retained Earnings, December 31, 2018 $110,000 [Ref: Income Statement] $791,070 $681,070 Rapid Roller, Inc. 1) Income Statement For the Year Ended December 31, 2018 Net Sales Cost of Goods Sold Gross Profit Operating Expenses: Selling Expenses $195,000 Administrative Expenses $245,000 Total Operating Expenses Operating Profit Other Revenues and Expenses: Rent Revenue $26,000 Gain on Sale of Land $177,000 Total Other Revenues and Expenses Income Before Income Taxes Income Tax Expense Net Income $440,000 $963,070 $203,000 $1,166,070 $325,000 $841,070

$365,000 $24,000 $389,000 Rapid Roller, Inc. 3) Balance Sheet December 31, 2018 Assets Liabilities & Shareholders' Equity Current Assets: Current Liabilities: Cash $140,000 Accounts Payable Net Accounts Receivable $253,000 Salaries and Wages Payable Notes Receivable $10,000 Total Current Liabilities Supplies $23,000 Long-Term Liabilities Inventory 12/31/18 $864,070 Notes payable Total Current Assets $1,290,070 Mortgage Payable Property, Plant and Equipment: Total Long-Term Liabilities Land $155,000 Total Liabilities Building $2,000,000 Shareholders' Equity: Less: Accum. Dep.-Build. -$450,000 $1,550,000 Common Stock Equipment $1,250,000 Additional Paid in Capital Less: Accum. Dep.-Build. -$300,000 $950,000 Retained Earnings Property, Plant and Equipment, Net $2,655,000 Total Shareholders' Equity Total Assets $3,945,070 Total Liabilities & Shareholders' equity $125,000 $1,750,000 $1,875,000 $2,264,000 $20,000 $980,000 $681,070 [Ref: Statement of Retained Earnings] $1,681,070 $3,945,070