lexander the Great-k. × / Homework #9 Accountr 1MDIOODlyODVa/a/MTQ3Mzg2Mz12MzNa/

Question

lexander the Great-k. × / Homework #9 Accountr 1MDIOODlyODVa/a/MTQ3Mzg2Mz12MzNa/details Homework 9 exercise 17-3 PREPARING FINANCIAL STATEMENTS As the accountant for Wheatley International, it is your job to prepare the company's income statement and balance sheet. Use the accounts listed below to construct the statements. Assume that the tax rate is 25%. List of Accounts for Wheatley International Accounts Receivable S 120,600 1,500,000 61,200 54,000 Notes Receivable Insurance Expenses Accounts Payable Interest Expenses Common Seock Deprociation Net Sales Ending Inventory Notes Payable (LongTerm)210,000 Beginning Inventory Retained Earnings Advertising Expense Cash Salaries Short-Term Notes Puyable Merchandise Purchased (for Inventory) 316,800 Buildings ,896,000 400,000 1,053,000 126,600 154.800 1,459,800 180,000 15,600 1,050,000 13,800 8,400 1,066,000 90,000 Equipment&Vehicles; Bonds Payable

Explanation / Answer

Wheatley International Income Statement REVENUES Net Sales $1,053,000 COST OF GOODS SOLD Beginning Inventory $154,800 Merchandise Purchased 316,800 Cost of Goods Available For Sale 471,600 Less: Ending Inventory -126,600 Cost of Goods Sold $345,000 GROSS PROFIT (GROSS MARGIN) $708,000 OPERATING EXPENSES Selling Expenses Salaries $180,000 Advertising 90,000 Total Selling Expenses $270,000 General Expenses Insurance $54,000 Interest Expense 24,600 Rent 13,800 Utilities 8,400 Total General Expenses $100,800 Total Operating Expenses $370,800 NET PROFIT (INCOME) BEFORE TAXES 337,200 Less: Income Tax Expenses (25%) 84,300 NET INCOME (PROFIT) AFTER TAXES $252,900 Wheatley International Balance Sheet ASSETS Current Assets Cash $72,000 Accounts Receivable 120,600 Notes Receivable 61,200 Inventory 126,600 Total Current Assets $380,400 Fixed Assets Land $1,500,000 Buildings 1,050,000 Equipment & Vehicles 1,066,000 Depreciation -400,000 Total Fixed Assets $3,216,000 Other Assets Goodwill $90,000 Total Other Assets $90,000 TOTAL ASSETS $3,686,400 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities Accounts Payable $45,000 Short-Term Notes Payable 15,600 Total Current Liabilities $60,600 Long?Term Liabilities Notes Payable (Long-Term) $210,000 Bonds 60,000 Total Long?Term Liabilities $270,000 Total Liabilities 330,600 Owner’s Equity Common Stock $1,896,000 Retained Earnings 1,459,800 Total Owner’s Equity $3,355,800 TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY $3,686,400

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