Question

2 Classification of accounts as to where they go in the financial statements: IS = Income Statement 3 RE = Retained Earnings Statement 4 BS = Balance Sheet 5 RE (Begining balance) Dr. Cr. 24,100 910,000 2,000 14,000 105,000 155,000 301,000 2,000 8,000 23,000 90,000 5,000 7,100 9,000 3,000 XYZ Company Inc. Adjusted Trail Balance December 31, 2018 Account Retained carnings, January 1, 2018 Sales Unexpired (prepaid) insurance Depreciation expense-office Sales salaries and commissions expense Building, net of $80.000 accumulated depreciation Net cost of purchases Premium on bonds payable Payroll taxes expense-sales Accounts payable Note payable (exactly one year) Trademark Payroll tax expense-office Available-for-sale securities (> 1 year) Salaries payable Advertising expense Transportation-out Inventory, January 1, 2018 Insurance expense-office Equipment and furniture, net of $30,000 accumulated depreciation Sales returns and allowances Gain on sale of investments Interest expense Land Income tax expense Common (capital) stock Paid-in-capital in excess of par Bad debt expense Cash Office and Officer's salaries expense Accounts receivable, net of $1,900 allowance for doubtful accounts Bonds payable Totals 9,500 2,500 69,000 1,900 22 IS (Cost of goods sold) NN 140,000 10,000 25 2,300 6,800 50,000 153,600 40,000 500 3,500 3,000 90,000 49,000 36 100,000 1,194,900 37 1,194,900 39 Additional Information: Inventory, December 31, 2018 40 IS (Cost of goods sold) and BS (Current assets) 100,000

Create an individual Income Statement, Retained Earning, and Balance Sheet.

Answer 1

Solution

(A) Income Statement:

XYZ Company Inc.
Income Statement
For the year ended on 31st December, 2018
Particulars	Amount ($)	Amount ($)
Revenue
Sales	9,10,000.00
Less: Returns and Allowances	10,000.00	9,00,000.00
Total Revenue		9,00,000.00
Less: Operating Expenses
Cost of Goods Sold:
Opening Inventory	69,000.00
Add: Cost of Purchases	3,01,000.00
Less: Closing Inventory	1,00,000.00	2,70,000.00
Selling Expenses:
Sales Salaries and Commission	1,05,000.00
Payroll Tax Expenses - Sales	8,000.00
Advertisement Expenses	9,500.00
Transportation-out	2,500.00	1,25,000.00
Administrative Expenses:
Office Salaries	90,000.00
Payroll Tax Expenses - Office	7,100.00
Insurance Expenses - Office	1,900.00	99,000.00
Bad Debt Expenses		3,500.00
Depreciation and Amortization:
Depreciation Expenses - Office	14,000.00	14,000.00
Operating Income		3,88,500.00
Other Incomes and Expenses
Gain on Sale of Investments		2,300.00
Interest Expenses		-6,800.00
Income before Tax		3,84,000.00
Less: Income Tax Expenses		1,53,600.00
Net Income		2,30,400.00

(B) Retained Earnings Statement:

XYZ Company Inc.
Retained Earnings Statement
For the year ended on 31st December, 2018
Particulars	Amount ($)
Opening Balance	24,100.00
Add: Income during the year	2,30,400.00
Closing Balance	2,54,500.00

(C) Balance Sheet:

XYZ Company Inc.
Balance Sheet
As at 31st December, 2018
Particulars	Amount ($)	Amount ($)
ASSETS
Current Assets
Cash and Cash Equivalents		3,000.00
Accounts Receivables		49,000.00
Inventories		1,00,000.00
Unexpired Insurance		2,000.00
Total Current Assets		1,54,000.00
Non-Current Assets
Plant, Property and Equipment:
Land	50,000.00
Building	1,55,000.00
Equipment and Furniture	1,40,000.00
Trademark	5,000.00	3,50,000.00
Other Non-Current Assets:
Available-for-Sale Security		9,000.00
Total Non-Current Assets		3,59,000.00
Total Assets		5,13,000.00
LIABILITIES
Current Liabilities
Accounts Payable		23,000.00
Notes Payable		90,000.00
Salaries Payable		3,000.00
Total Current Liabilities		1,16,000.00
Non-Current Liabilities
Bonds Payable		1,00,000.00
Premium on Bonds Payable		2,000.00
Total Non-Current Liabilities		1,02,000.00
Total Liabilities		2,18,000.00
STOCKHOLDERS' EQUITY
Common Stock		40,000.00
Paid-in-capital in excess of par		500.00
Retained Earnings		2,54,500.00
Total Stockholders' Equity		2,95,000.00
Total Liabilities and Stockholders' Equity		5,13,000.00