Question

The Lannister Company, located in Crawleyville, Indiana, manu factures replica swords that are sold worldwide. The date is December 31, 2019, which is the end of the company's fiscal year. As such, the Lannister Company is prepared to draft its financial statements. Your job is to create these financial statements using the following information regarding account balances. Accounts Payable In vestments in Real Estate Accounts Receivable Accumulated Depreciation- Equipment Loss from Employee Strike Mortgage Payable Advertising Expense Notes Payable 287,000 Notes Recei vable Patents 60,000 800,000 Prepaid Insurance Cost of Goods Sold Retained Eamings Equipment 120,000 Salaries and Wages Expense Sales Discounts Sales Revenue 2,500,000 Gain on Disposal of Plant Assets Salaries and Wages Payable Income Tax Expense Sales Returns and Allowances 4,000 Supplies Insurance Expense Interest Expense Interest Payable Unearned Sales Revenue Interest Revenue Utility Expen se 17,000 Inventory Additional data S10,000 of the Notes Payable is due in 2020 while the remainder is due beyond that year $5,000 of the Interest Payable is due in 2020 while the remainder is due beyond that .$20,000 of the Mortgage Payable is due in 2020 while the remainder is due beyond that

Answer 1

Answer;

Lannister Company Income Statement For the year ending December 31, 2019 Sales Revenue 2,500,000 Less: Sales Return and allowances (15,000) (10,000) Less: Sales Discounts Sales Revenue (Net) 2,475,000 Cost of goods sold (1,800,000) Gross Income ( A) 675,000 Less: Operating expenses; Advertising expenses 20,000 Freight-out 5,000 Depreciation Expenses 10,000 Insurance expenses 24,000 Interest expenses 4,000 Salaries and Wages expenses 250,000 Utility expenses 17,000

Total operating expenses (B) 330,000 Net income from operation (C) (A) - (B) 345,000 Gain on Disposal of Plant assets 3,000 Interest Revenue 2,000 Loss from Employee strike (21,000) Other income (Net) (D) (16,000) Net income before Income Tax (E) (C) (D) 329,000 Less: income tax expenses (79,000) Net income 250,000

Lannister Company Statement of owner's equity For the year ending December 31, 2019 Common stock 200,000 Retained Earnings 100,000 Add: net income 250,000 Less: Dividends (15,000) Retained Earnings (Ending balance) 335,000 Total owner's equity 535,000

Horton Company Classified Balance Sheet 31-Dec-10 ASSETS l. Non-Current Assets Equipment (gross) 120,000 Less: Accumulated depreciation- Equipment (25,000) Equipment (net) 95,000 Land 50,000 Patents 60,000 Trademarks 31,000 Il. Investments Investment in Real Estate 75,000 IIl Current Assets; 287,000 Cash Accounts Receivable 210,000 Inventory 40,000 Notes Receivable 28,000 Prepaid Insurance 6,000 Supplies 5,000 TOTAL 887,000

EQUITY AND LIABILITIES I. Owner's equity; 535,000 Il. Non-Current Liabilities Mortgage Payable S 250,000 S 20,000) 230,000 Notes Payable (S 30,000 - S 10,000) 20,000 Interest Payable (S 20,000-S 5000) 15,000 III. Current Liabilities Accounts Payable 35,000 Interest Payable 5,000 Mortgage Payable 20,000 Notes Payable 10,000 Unearned Sales Revenue 5,000 Salaries and Wages Payable 12,000 TOTAL 887,000

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