Balance Sheet June 30th, Year 5 Assets Cash 10,000 Accounts receivables 34,000 Inventory Prepaid Insurance Capital Assets Accumulated depreciation (40,000) Total Assets 268,000 60,000 4,000 200,000 Liabilities and Equity Accounts Payable Wages Payable Income Tax Payable Notes Payables 19,000 4,000 80,000 100,000 The following are all transactions that happened during Year 6: Made all sales on account of $251,600 1,000 Common Shares Retained Earnings Total Liabilities and Equity 268,000 Collected accounts receivable of $249,040 Purchased merchandise on account of $134,000 Determined cost of goods sold was $140,000 Paid accounts payable (for merchandise purchased) of $143,000 Paid wages to employees of $52,500 64,000 Accrued wages expense (and wages payable) of $1,500 at June 30th, Year 6. Paid insurance premium of $18,000 to extend coverage for three years. Allocated $5,000 of prepaid insurance to insurance expense. Recorded Year 6 total income tax expense (and income tax payable) of $13,000 Paid income taxes to government of $11,500 (this represents the final portion of Year 5 taxes and initial installments of Year 6 taxes). Depreciation for the year $10,000

Balance Sheet June 30th, Year 5 Assets Cash 10,000 Accounts receivables 34,000 Inventory Prepaid Insurance Capital Assets Accumulated depreciation (40,000) Total Assets 268,000 60,000 4,000 200,000 Liabilities and Equity Accounts Payable Wages Payable Income Tax Payable Notes Payables 19,000 4,000 80,000 100,000 The following are all transactions that happened during Year 6: Made all sales on account of $251,600 1,000 Common Shares Retained Earnings Total Liabilities and Equity 268,000 Collected accounts receivable of $249,040 Purchased merchandise on account of $134,000 Determined cost of goods sold was $140,000 Paid accounts payable (for merchandise purchased) of $143,000 Paid wages to employees of $52,500 64,000 Accrued wages expense (and wages payable) of $1,500 at June 30th, Year 6. Paid insurance premium of $18,000 to extend coverage for three years. Allocated $5,000 of prepaid insurance to insurance expense. Recorded Year 6 total income tax expense (and income tax payable) of $13,000 Paid income taxes to government of $11,500 (this represents the final portion of Year 5 taxes and initial installments of Year 6 taxes). Depreciation for the year $10,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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