Superior Hardwood Company distributes hardwood products to small furniture manuf

Question

Superior Hardwood Company distributes hardwood products to small furniture manufacturers. The adjusted trial balance data given below is from the firm’s worksheet for the year ended December 31, 2019.

Required:

Prepare a classified income statement for the year ended December 31, 2019. The expense accounts represent warehouse expenses, selling expenses, and general and administrative expenses.

Prepare a statement of owner’s equity for the year ended December 31, 2019. No additional investments were made during the period.

Prepare a classified balance sheet as of December 31, 2019. The mortgage payable extends for more than a year.

Analyze:
What is the current ratio for this business?

ACCOUNTS Debit Credit Cash $ 23,900 Petty Cash Fund 600 Notes Receivable, due 2020 11,600 Accounts Receivable 94,000 Allowance for Doubtful Accounts $ 5,800 Merchandise Inventory 232,000 Warehouse Supplies 2,840 Office Supplies 1,400 Prepaid Insurance 9,600 Land 44,000 Building 176,000 Accumulated Depreciation—Building 52,800 Warehouse Equipment 36,000 Accumulated Depreciation—Warehouse Equipment 16,800 Delivery Equipment 50,000 Accumulated Depreciation—Delivery Equipment 19,200 Office Equipment 24,000 Accumulated Depreciation—Office Equipment 11,400 Notes Payable, due 2020 20,000 Accounts Payable 38,800 Interest Payable 560 Mortgage Payable 60,000 Loans Payable, Long-term 16,000 Charles Ronie, Capital (Jan. 1) 449,760 Charles Ronie, Drawing 126,800 Income Summary 242,000 232,000 Sales 1,681,000 Sales Returns and Allowances 18,000 Interest Income 1,560 Purchases 765,000 Freight In 13,600 Purchases Returns and Allowances 8,240 Purchases Discounts 10,960 Warehouse Wages Expense 197,600 Warehouse Supplies Expense 6,900 Depreciation Expense—Warehouse Equipment 5,600 Salaries Expense—Sales 267,200 Travel and Entertainment Expense 21,300 Delivery Wages Expense 60,130 Depreciation Expense—Delivery Equipment 9,600 Salaries Expense—Office 70,400 Office Supplies Expense 3,800 Insurance Expense 6,000 Utilities Expense 9,090 Telephone Expense 6,320 Payroll Taxes Expense 58,000 Property Taxes Expense 5,400 Uncollectible Accounts Expense 5,600 Depreciation Expense—Building 8,800 Depreciation Expense—Office Equipment 3,800 Interest Expense 8,000 Totals $ 2,624,880 $ 2,624,880 its Net sales of goods sold 2018 erence livered cost of purchases on sales and admir strative oxpenses

Explanation / Answer

1.

2.

3.

Analyze:

Current ratio = Current assets/Current liabilities = $370140/$59360 = 6.24

SUPERIOR HARDWOOD COMPANY Income Statement For the Year Ended December 31, 2019 Operating revenue Sales 1681000 Less: Sales returns and allowances 18000 Net sales 1663000 Cost of goods sold Merchandise inventory, January 1, 2019 242000 Purchases 765000 Freight in 13600 Delivered cost of purchases 778600 Purchases discounts 10960 Purchases returns and allowances 8240 19200 Net delivered cost of purchases 759400 Total merchandise available for sale 1001400 Merchandise inventory, December 31, 2019 232000 Cost of goods sold 769400 Gross profit on sales 893600 Operating expenses Warehouse expenses Warehouse wages expense 197600 Warehouse supplies expense 6900 Depreciation expense-warehouse equipment 5600 Total warehouse expenses 210100 Selling expenses Salaries expense-sales 267200 Travel and entertainment expense 21300 Delivery wages expense 60130 Depreciation expense-delivery equipment 9600 Total selling expenses 358230 General and administrative expenses Salaries expense-office 70400 Office supplies expense 3800 Insurance expense 6000 Utilities expense 9090 Telephone expense 6320 Payroll taxes expense 58000 Property taxes expense 5400 Uncollectible accounts expense 5600 Depreciation expense-building 8800 Depreciation expense-office equipment 3800 Total general and administrative expenses 177210 Total operating expenses 745540 Income from operations 148060 Other income Interest income 1560 Other expenses Interest expense 8000 Net nonoperating expense 6440 Net income for year 141620

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.