The hypothetical company XYZ Inc started its operations in 2020. On December 31 2020, it had the following adjusted trial balance:

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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The hypothetical company XYZ Inc started its operations in 2020. On December 31 2020, it had the following adjusted trial balance:

 

Account

Balance ($)

Notes Payable

20,000

Wages Payable

8,000

Additional Paid In Capital

300,000

Common Stock at par value

60,000

A/P

60,000

PP&E (at cost)

110,000

Inventory

62,000

Cash

419,000

Unearned Revenues

10,000

Accumulated Depreciation

10,000

Account Receivables

?

Retained Earnings

230,000

 

 

 

During 2021 the following transactions occurred:

 

  1. A dividend of $20,000 was declared during 2021. These dividends will be paid in 2022.
  2. During the year the company performed and delivered services and billed its clients for $900,000. Collections from customers were $800,000.
  3. In addition to the transactions described in items 3 above, products were shipped to the customers who paid $10,000 in advance (see December 31, 2020 balances). The selling price was $80,000 and the customer paid the balance in 2021.
  1. The company purchased $350,000 worth of inventory, on account. Payments on accounts payable were $200,000.
  1. Miscellaneous expenses in the amount of $24,000 were paid in cash
  2. Based on a physical count, inventory balance as of December 31, 2020 was $71,000.
  3. The employees earned $200,000 as wages. Cash wage payments to employees were $190,000.
  4. Additional PP&E worth $30,000 was purchased in cash. Depreciation for the year equals $10,000.
  5. 10,000 shares at par value of $1 were issued and sold for $20 per share.
  6. The note worth of $20,000 was paid with an additional Interest expense of $200.
  7. The company incurred $24,000 in rent expenses and paid $22,000 of it.
  8. The company calculated its tax obligations for 2021. Tax in the amount of $40,000 is due for the entire year of which $30,000 was paid in the previous quarters of 2021.

 

Prepare the Balance Sheet as of December 31, 2021

 

Cash 

Inventories 

Account Receivables 

PP&E 

Accumulated Depreciation 

TOTAL ASSETS 

Accounts Payable 

Wages Payable 

Rent Payable 

Taxes Payable 

Dividends Payable 

TOTAL LIABILITIES 

Common Stock at par 

Additional Paid In Capital 

Retained Earnings 

TOTAL EQUITY 

TOTAL LIABILITIES + EQUITY 

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