PROBLEM#2 Prepare an income statement, statement of owners equity and balance sh

Question

PROBLEM#2 Prepare an income statement, statement of owners equity and balance sheet for Green Day Co. as of 12-31 . . Sales 7,387,500.00 Salary Expense 450,000.00 Cash 700,000.00 Accts Receivable 500,000.00 Equipment 420,000.00 Accumulated Depreciation Equipment 60,000.00 Building 620,000.00 Mortgage Payable 360,000.00 Drawing 50,000.00 Advertising Expense 1,400,000.00 Rent Expense 350,000.00 Accumulated Depreciation Building 90,000.00 Accts Payable 200,000.00 Note Payable ? you have to solve for notes payable Capital 1/1 900,000.00 Cost of Mdse Sold 4,600,000.00 Prepaid Rent 80,000.00 Supplies 50,000.00 Land 200,000.00 Depreciation Expense 20,000.00 Supply Expense 100,000.00

Explanation / Answer

Income statement of Green day company as of 12-31..

                                                                         Amount
Sales                                                                                       7,387,500
Less: Cost of Mdse sold                                                       4,600,000
Gross Profit                                                                             2,787,500
Less:Salary expenses    450,000
        Advertising Expenses                                                       1,400,000
        Rent Expenses    350,000
        Supply expenses                                                               100,000
        Depreciation expenses                                                        20,000
Net Profit (to be carried forward to owner's equity)                        467,500

Statement of Owner's equity as of 12-31...
Opening Capital                                                                         900,000
Add: net profit for the year                                                          467,500
                                                                                              1,367,500
Less: Drawings                                                                            50,000
Closing capital (to be transferred to Balance sheet)                     1.317,500

Balance Sheet of Grey day Co. as of 12-31

  

Liabilities Amount Asset Amount Owner's Equity 1317,500 land 200,000 mortgage payable 360,000 Building                   620000 Accounts Payable 200,000 Less. Accu. Depre.   (90000) 530,000 Notes payable (Bal. figure) 542500 Equipment              420000 Less: Accu.Depre.    60000 360,000 Account receivable 500,000 Supplies 50,000 Cash 700,000 Prepaid Rent    80,000 Total 2,420,000 Total 2,420,000

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