Dawson O'Connor is the owner of Miller Island Sales, a distributor of fishing supplies. The following is the balance sheet of the company as of December 31, 2018: Cash $2,300 Accounts payable $6,400 Accounts receivable 10,400 Salaries payable 1,200 Inventory 12,500 Equipment 8,000 Less: Accumulated depreciation (6,500) D. O'Connor, capital 19,100 $26,700 $26,700
Dawson O'Connor is the owner of Miller Island Sales, a distributor of fishing supplies. The following is the balance sheet of the company as of December 31, 2018: Cash $2,300 Accounts payable $6,400
Checks written: $169,800 summarized as follows:
| Inventory | $123,100 |
| Salaries | 4,250 |
| Rent | 4,800 |
| Equipment | 4,000 |
| Note payments (including interest of $650) | 2,650 |
| Office expense | 3,400 |
| Auto expense | 4,100 |
| Withdrawals | 23,500 |
| $169,800 |
Other information about the company is as follows:
- Accounts receivable at December 31, 2019, $9,200.
- Accounts payable at December 31:
2018: Inventory $6,100 2019: Inventory $8,500 Office expense 300 Auto expense 200 $6,400 $8,700 - Salaries payable at December 31, 2019, $1,800.
- Equipment is
depreciated by the straight-line method over a 10-year life. The equipment purchased in 2019 was acquired on July 1. All of the equipment will have zero salvage value at the end of its useful life. - Interest payable at December 31, 2019, $140.
- The company uses a periodic inventory system. Inventory at December 31, 2019, $17,400.
Required:
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1. Prepare a worksheet to summarize the transactions and adjustments of Miller Island Sales for 2019. Enter all amounts as positive numbers. (Hint: Include debit and credit columns for both transactions and adjustments.)
2. Prepare a income statement for 2019.
Prepare a balance sheet as of December 31, 2019.
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