MS, Inc. is a retail that engaged you to assist in the preparation of its financial statement at December 31, 2018. Following are the correct adjusted is alphabetical order, as of that date. Each balance is the "normal" balance for that accountthe normal balance is the same as the debit or credit Side that increases the accountAccounts payable…………………………… $12,750 Accounts receivables ……………………….. 2,600 Accumulated depreciation: office equipment. 12,000 Additional paid in capital (common stock)….. 13,000 Bonds payable (due December 31, 2021) …… 22,500Cash…………………………………………. 19,200 Common stock (1,800 shares, $10par value).. 18,000Cost of goods sold…………………………… 100,575 Deferred income taxes………………………. 5,750Depreciation expense: office equipment 2.750Dividends declared…………………………… 5,000 Income tax expense………………………….. 8,190 Insurance expense……………………………. 900Land………………………………………….. 39,500Merchandise inventory..................................... 17,500Notes payable (due December 31, 2019)……. 2,500Office equipment…………………………….. 41,000Office supplies................................................. 900Office supplies expense……………………… 520Preferred stock (250 shares, $20 par value)…. 5,000Premium on bonds payable………………….. 1,750repaid rent…………………………………… 1,800 Rent expense………………………………… 6,100Retained earnings (January 2018)…………… 21,050Salaries expense……………………………… 88,095Sales …………………………………………. 226,000Sales returns and allowances…………………. 2,500Sales taxes payable……………………………. 3,200Treasury stock (200 common shares at cost)…. 2,250 Utilities expense……………………………… 4,120 I need a. Prepare an income statement for the year ended December 31, 2018for gross profit, income before income taxes, and net income. List expenses (0ther than cost ofSods sold and income tax expense) in order, from the largest to the smallest dollar balance. I may ignore earnings per share.b. Prepare a statement of retained earnings for the year ending December 31, 2018.c. Prepare a statement of financial position (balance sheet) as of December 31. 2018, followingthese guidelines:-Include separate asset and liability categories for those items that are “current."assets, total liabilities, total stockholders' equity, and-Include and label amounts for total liabilities and total stockholders' equity. -Present deferred income taxes as a noncurrent liability -To the extent information is available that should be disclosed, include the parentheticaldisclosure of that information.
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
MS, Inc. is a retail that engaged you to assist in the preparation of its financial statement at December 31, 2018. Following are the correct adjusted is alphabetical order, as of that date. Each balance is the "normal" balance for that account
the normal balance is the same as the debit or credit Side that increases the account
Accounts payable…………………………… $12,750
Additional paid in capital (common stock)….. 13,000
Bonds payable (due December 31, 2021) …… 22,500
Cash…………………………………………. 19,200
Common stock (1,800 shares, $10par value).. 18,000
Cost of goods sold…………………………… 100,575
Depreciation expense: office equipment 2.750
Dividends declared…………………………… 5,000
Income tax expense………………………….. 8,190
Insurance expense……………………………. 900
Land………………………………………….. 39,500
Merchandise inventory..................................... 17,500
Notes payable (due December 31, 2019)……. 2,500
Office equipment…………………………….. 41,000
Office supplies................................................. 900
Office supplies expense……………………… 520
Preferred stock (250 shares, $20 par value)…. 5,000
Premium on bonds payable………………….. 1,750
repaid rent…………………………………… 1,800
Rent expense………………………………… 6,100
Salaries expense……………………………… 88,095
Sales …………………………………………. 226,000
Sales returns and allowances…………………. 2,500
Sales taxes payable……………………………. 3,200
Treasury stock (200 common shares at cost)…. 2,250
Utilities expense……………………………… 4,120
I need
a. Prepare an income statement for the year ended December 31, 2018
for gross profit, income before income taxes, and net income. List expenses (0ther than cost of
Sods sold and income tax expense) in order, from the largest to the smallest dollar balance. I may
ignore earnings per share.
b. Prepare a statement of retained earnings for the year ending December 31, 2018.
c. Prepare a
these guidelines:
-Include separate asset and liability categories for those items that are “current."
assets, total liabilities, total
-Include and label amounts for total liabilities and total stockholders' equity.
-Present deferred income taxes as a noncurrent liability
-To the extent information is available that should be disclosed, include the parenthetical
disclosure of that information.
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