answers
ABC Corporation had the following
| Balance Sheet | |||
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Current Assets |
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Liabilities |
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Cash |
$16,300 |
Accounts payable |
$14,600 |
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16,000 |
Notes payable |
20,400 |
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Inventory |
32,300 |
Bonds payable |
58,000 |
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Prepaid expenses |
20,200 |
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Capital Assets |
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Shareholders’ Equity |
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Plant and equipment (gross) |
$254,000 |
Common stock |
$75,000 |
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Less: Accumulated amortization |
51,600 |
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119,200 |
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Net plant and equipment |
202,400 |
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Total assets |
$287,200 |
Total liabilities and shareholders’ equity |
$287,200 |
Sales for 20XY were $221,000, with cost of goods sold being 58 percent of sales. Amortization expense was 10 percent of plant and equipment (net) at the beginning of the year. Interest expense for the bonds payable was 11 percent, while interest on the notes payable was 12 percent. These are based on December 31, 20XX, balances. Selling and administrative expenses were $28,800, and the tax rate averaged 18 percent.
During 20XY, the cash balance and prepaid expense balance were unchanged. Accounts receivable and inventory each increased by 15 percent, and accounts payable increased by 31 percent. A new machine was purchased on December 31, 20XY, at a cost of $30,000. A cash dividend of $8,630 was paid to common shareholders at the end of 20XY. Also, notes payable increased by $2,898 and bonds payable decreased by 10,450. The common stock account did not change.
a. Prepare an income statement for 20XY. (Input all answers as positive values.)
| ABC Corporation Income Statement For the Year Ending December 31, 20XY |
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$ |
b. Prepare a balance sheet as of December 31, 20XY. (Input all answers as positive values. Be sure to list the assets and liabilities in order of their liquidity.)
| ABC Corporation Balance Sheet For the Year Ended December 31, 20XY |
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| Current Assets: | Liabilities: | ||||
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$ |
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$ |
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Total current assets |
$ |
Total liabilities |
$ |
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| Capital assets | Shareholders’ equity | ||||
| $ | $ | ||||
| Net plant and equipment | |||||
| Total assets | $ |
Total liabilities and shareholders' equity |
$ | ||
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