THE PANAMA PAJAMA COMPANY Adjusted Trial Balance 12/31/18 2018 Adjusted Trial Ba

Question

THE PANAMA PAJAMA COMPANY Adjusted Trial Balance 12/31/18 2018 Adjusted Trial Balance 2017 Balance Sheet Info Account Title Debit Credit Debit Credit $ 137,100 12,000 4,400 26,000 59,000 $ 35,700 11,000 5,600 20,000 21,000 Cash Accounts Receivable Inventor Office Equipment Machinery & Tools Accumulated Depreciation-Plant Assets Accounts Payable Note Payable-Short Term Note Payable-Long Term Common Stock, $10 par Retained Earnings Dividends Sales Revenue Cost of Goods Sold Rent Expense Advertising Expense Depreciation Expense $8,600 12,200 10,000 33,000 150,000 6,000 9,800 15,500 50,000 12,000 1,000 30,700 11,600 2,000 800 2,600 $ 256,500 $ 244,500 Transaction Data for 2018 (Note, these transactions were included in the trial balance numbers above.) Cash paid for purchase of office equipment Cash paid for purchase of tools Acquisition of Machinery with Notes Payable-Long-term Cash payment of dividends Cash receipt from issuance of 10,000 shares of common stock $6,000 5,000 33,000 1,000 100,000 Requirements: (See sheet tabs at bottom. Use each sheet for the following requirements.) Use Excel Skills in completing these requirements. You must use formulas and functions, cell references, and professional formatting 1. Prepare the Panama Pajama Company multi-step income statement for the year ended December 31, 2018. Include the EPS at the bottom. Also include a vertical analysis column at the right and perform a vertical analysis of the income statement. (Use percentage format with 1 decimal place.) 2. Prepare the Panama Pajama Company balance sheet for December 31, 2018. Include a vertical analysis column at the right and perform a vertical analysis of the balance sheet. (Use the percentage format with 1 decimal place.) 3. Prepare the Panama Pajama Company statement of cash flows for the year ended December 31, 2018. Use the indirect method 4. Complete the analvsis of the financial statements as directed on the Analvsis sheet Instructions Income Statement Balance Sheet Stmt of Cash Flows Analysis

Explanation / Answer

1 Income statement Sales revenue 30700 Expense Cost of goods sold 11600 rent expense 2000 Advertising expense 800 Depreciation expense 2600 Total expense 17000 Net income 13700 Vertical analysis % change to sale Sales 30700 100.0% Cost of goods sold 11600 37.8% Gross margin 19100 62.2% Operating expense 5400 17.6% Net income (loss) 13700 44.6% Balance sheet Assets Cash 137100 59.6% Accounts receivable 12000 5.2% Inventory 4400 1.9% Total current assets 153500 66.8% Officxe equipment 26000 11.3% Machinery and tools 59000 25.7% Accumulated depreciation plant assets -8600 -3.7% Total plant assets 76400 33.2% Total assets 229900 100.0% Liabilities and shareholders equity Liabilities Accounts payable 12200 5.3% Notes payable short term 10000 4.3% Total current liabilities 22200 9.7% Notes payable long term 33000 14.4% Total liabilities 55200 24.0% Shareholders equity Common stock 150000 65.2% Retained earnings 24700 10.7% Total shareholdres equity 174700 76.0% Total liabilities and shareholders equity 229900 100.0%

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