Question

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Please use the following information (below) to create a financial statements such as a balance sheet, income, cash flow, etc.

Required information [The following information applies to the questions displayed below] Sage Inc. experienced the following transactions for 2018, its first year of operations: 1. Issued common stock for $110,000 cash 2. Purchased $185,000 of merchandise on account. 3. Sold merchandise that cost $162,000 for $322,000 on account 4. Collected $286,000 cash from accounts receivable. 5. Paid $165,000 on accounts payable. 6. Paid $56,000 of salaries expense for the year. 7. Paid other operating expenses of $72,000. 8. Sage adjusted the accounts using the following information from an accounts receivable aging schedule: Number of Days Percent Likely to Be Uncollectible Allowance Past Due Amount Balance $21,600 Current 0.01 9,000 1,800 1,800 1,800 0-30 .05 31-60 61-90 Over 90 days 0.10 0.20 0.50

Answer 1

Event Cash Assets Account Merchandise - Allowance + receivable Inventory Account title for retained earnings = Liabilities + Account payable + = 185,000 Equity Common Retained equity earning 110,000 110,000 + 185,000 -162,000 3a. + + = -162,000 Cost of good sold 322,000 Sales 3b. + + 322,000 -286,000 + + -165,000 + + 286,000 + -165,000 + -56,000 -72,000 + + + = + + -56,000 Salaries -72,000 Operating expenses Uncollectible -2,106 account expenses 29,894 -2106 + Balance 103,000 + 36,000 - -2,106 + 23,000 = 20,000 + 110,000 =

Account receivable allowance Allow Allowance % likely uncollectable 0.01 0.05 Past dues Current 0-30 31-60 61-90 >90 Amt $21,600 9,000 1,800 1,800 1,800 0.1 $216 $450 $180 $360 $900 $2,106 0.2 0.5

322,000 -162,000 160,000 Income Statement Sales Cost of good sold Gross margin Operating expenses Other operating expenses -72,000 Salaries expense -56,000 Uncollectible account expense -2,106 -130,106 Total operating expense Net Income -130,106 29,894

Statement of change in stockholder's equity Beginning common stock Plus: Stock issued 110,000 Ending Common stock 110,000 Beginning retained earning Plus: Net income 29,894 Ending retained earning 29,894 Total stockholder's equity 139,894

103,000 Balance Sheet Asset Cash Account receivable 36,000 Less: Allowance for doubtfull debt -2,106 Merchandise inventory Total Asset Liabilities Account Payable 20,000 33,894 23,000 159,894 20,000 Total liabilities Stockholder's equity Common stock Retained earning 110,000 29,894 139,894

Statement of the cash flow Cash flow from operating activities Inflow from customer 286,000 Outflow for expenses -128,000 Outflow for inventory -165,000 -7,000 Net cash flow from operating activities Cash flow form investing activities Cash flow form financing activities Cash flow from stock issued 110,000 110,000 103,000 Net cash flow from financing activities Net change in cash Add: Beginning cash balance Ending cash balance 103,000

Net realizable account receivable Account receivable 36,000 Less: Allowance for doubtful debt -2,106 Net realizable account receivable 33,894

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