The following information applies to the questions displayed below.] Sage Inc. e

Question

The following information applies to the questions displayed below.]

Sage Inc. experienced the following transactions for 2018, its first year of operations:

Issued common stock for $50,000 cash.

Purchased $140,000 of merchandise on account.

Sold merchandise that cost $110,000 for $250,000 on account.

Collected $236,000 cash from accounts receivable.

Paid $118,000 on accounts payable.

Paid $50,000 of salaries expense for the year.

Paid other operating expenses of $28,000.

Sage adjusted the accounts using the following information from an accounts receivable aging schedule:

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 $50,000 cash. 2. Purchased $140,000 of merchandise on account. 3. Sold merchandise that cost $110,000 for $250,000 on account. 4. Collected $236,000 cash from accounts receivable 5. Paid $118,000 on accounts payable 6. Paid $50,000 of salaries expense for the year 7. Paid other operating expenses of $28,000. 8. Sage adjusted the accounts using the following information from an accounts receivable aging schedule: Number of Days Past Due Percent Likely to Be Uncollectible 0.01 0.05 0.10 0.20 0.50 Allowance Balance Current 0-30 31-60 61-90 Over 90 days Amount $10,000 2,000 1,200 500 300 b. Prepare the income statement, statement of changes in stockholders' equity, balance sheet, and statement of cash flows for Sage Inc. for 2018

Explanation / Answer

Sage Inc.

Income Statement

For the year ended 2018

Sage Inc.

Statement of Changes in Stockholders' Equity

For the year ended 2018

Sage Inc.

Balance Sheet

As of the end of the year 2018

Sage Inc.

Statement of Cash Flows

For the year ending 2018

$ $ Sales 250,000 Cost of Goods Sold 110,000 Gross Profit 140,000 Operating Expenses Salaries Expense 50,000 Other Operating Expenses 28,000 Bad Debt Expense 570 Total Operating Expenses 78,570 Net Operating Income 61,430

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