Question

The Copeland Company was founded on January 1, 2017; since then, the company has been fairly successful; however, in an effort to save some money, the president has been keeping track of the financial records rather than hiring a professional accountant. Although some data is missing, a comparative report of year-end account balances appears below; all numbers are as of December 31st unless noted otherwise. Rent expense Selling and admin. expenses Dividends Retained earnings, Dec. 31 Notes payable Accounts receivable Property and equipment Accounts payable Common stock Revenues Payroll expense Retained earnings, Jan. 1 Cash 2019 13,100 ? 3,200 287,800 20,000 2,800 337,230 ? 40,000 183,000 93,500 221,900 18,600 2018 12,800 6,400 4,800 221,900 16,000 ? 273,400 10,600 40,000 164,000 82,300 ? 13,500 C. Required: a. Prepare an income statement, statement of retained earnings and a balance sheet for each year and determine the missing values. b. Assess the company's comparative results for the two-year period from the perspective of a bank and then from the perspective of an investor (i.e. did things get better or worse from those perspectives and why). If you were a bank would you lend the company more money? If you were an investor would you invest more money in the company? Briefly explain your decisions. In 2020, the company had the following transactions: 1. Borrowed $3,000 from a bank 2. Sold $180,000 of services to customers 3. Paid $3,200 for advertising 4. Paid $92,000 in employee payroll 5. Made a payment on a bank loan for $2,500 6. Purchased $3,400 of equipment 7. Paid $14,000 in rent 8. Received $1,500 from customers on account 9. Paid $800 owed to suppliers 10. Paid $1,200 in dividends to owners Prepare a tabular analysis for 2020, record the transactions and prepare statement of cash flows, income statement, statement of retained earnings and balance for the company for that year.

Answer 1

Copeland Company Income Statement for the year ended 31st ended 31st Dec 2018 Amount ($) Total (2) 164,000 Revenues hels: Expenses Rent enpences Selling & Administrative empentes Pay roll expenses o Net Income 12,800 6,400 82, 300 (101, 500) 62,500 Copeland Company Statement of Retained Earnings for the year ended 318t Dec 2018 Beginning Retained Earnings (Jan 1) $ 164,200 62,500 Add: Net Income hess: Dividends $ 226, 700 (4,800 Ending Retained evenings (lec 31) $ 221,900 CS Scanned with CamScanner

Copeland company Balance Sheet as at dec 31 2018 Liabilities ($) Assets (0) 16,000 Cash 13,500 10, 600 Accounts Receivable 1,600 Notes Payable Accounts Payable 40,000 Retained Earnings 221, 900 Common Stock Property, plant & Equipment 273,400 288,500 288, 500 Numbers Workings # Calculation of misst ng - Beginning Retained farenings → closing retained Earnings = Beginning retained earnings + Net Income ] earnings => 221,900 = (x + 62, 500 4,800) Dividends - het the beginning retained be n => 221,900 + 4,800 kt 62,500 => n = 226, 700 62,500 => $ 164,200 So, the beginning Retained Earnings $ 164,200 CSScanned with CamScanner

2) Accounts Receivable Accounte Rocatvable hal a => As we know that "Debit' Balance and "Asset Side of the it is shown in the Balance Shoot Since, Liabilities Assets "In the Balance Shoot Therefore, Accounts Receivables =[Total liabilities - Total Assete => $(288,500 - $ 286, 900) $ 1,600 So, the accounts Receivable will be $1,600. Copeland company Income Statement for the year ended Dec 31 2019 Amount($) Total ($) Revenues $ 183,000 hess: Expenses Rent enpenses Selling & Distribution expenses Payroll expenses +3,100 7,300 93,500 (113, 900) 69,100 Net Income CS Scanned with CamScanner

1 Add : Net Income Copeland company Statement of Retained Earnings for the year ended 31st Dec 2019 Beginning Retained Earnings (Jan 1) $ 221,900 69, 100 291,000 Less: dividends (3,200) ( Dec 31) Retained Earnings closing $ 287, 800 Copeland company Balance Sheet > as as dec 31 2019 Assets ($) ($) Liabilities 18, 600 20,000 10, 830 2,800 Cash Notes Payable Accounts Receivable Accounts Payable to, soo Common Stock 40,000 Suitding Poco perety 9 Equipment 337, 230 Retained earning 287, 800 358, 630 358, 630 CSScanned with CamScanner

workings Numbers # Calculation of missing Statement of Retained Earnings From ( we can get Net Income Dinidends Balance + Net Income [opening losin Balance Let Net Income be k. => $ 221,900 tu 3,200 = $ 287, 800 221,900 tn 291,000 n (291,000 221,900 ) => x = 69,100 So, the Net Income will be $69,100: We know 1) Selling & distribution expenses that Total Revenue - Total Expenses Net Income. Total Revenue @. $ 183,000 ( Gönen) $ 69,100 ( by abone cal culations) bet admin selling & Distribution expenses be k. & (183,000 w+ 13,100 + 93, 500) 69, 100 C=annel8 R900A Stanley 7+ 106,600 69, 100 Net Income => 3

T! =7 77,000 k 69,100 7 -N 7,900 E? K = 7,900 so, Selling & distribution expenses will be = will be = $ 7,900. 27 Accounte Payable liability Total Assets Total liabilities ] Accounts Payable e a => Total Assets - $ 358,630 => het Accounts Payable be a = rt 347,800 358,630 => K = ( 358,630 347, 800) => x = $ 10,830 Therefore Accounts Payable will be - $ 10,830 CSScanned with CamScanner