Question 1 Please refer to the instructions and the table in this question. Enter the correct journal entry for part [A] in the following Balance Sheet and Income Statement for 20X2. Note that for the purpose of preparing the Balance Sheet at the end of each year: For investments, you need to classify whether they are current assets (i.e., short-term investment) or non-current assets (i.e., long-term investment); For bonds, you need to determine what portion of the bonds payable is current liability and what portion is non-current liability. Current portion of the bonds payable is the principal payment portion of the cash interest payments in the next year. Non-current portion is the remaining amount of the bonds payable; and For leases (as the lessee), you need to determine what portion of the lease obligation is current liability and what portion is non-current liability. Current portion of the lease obligation is the principal payment portion of the cash lease payment in the next year (i.e., the amortization amount of the lease obligation in the next year). Non-current portion is the remaining amount of the lease liability. Project 3.2 Balance Sheet Illini Company, Inc. Income Statement For the Year Ended December 31, 20X2 Sales $1,200,000 Cost of sales (inventory/equipment) 820,000 Gross profit 380,000 Operating expenses: Insurance expense 6,000 Utility expense 30,000 Rent expense 20,000 Compensation expense 110,000 Bad debt expense 6,350 Depreciation expense 38,090 Maintenance expense 1,000 Warranty expense 25,000 Rental expense (lease) [A] Pension expense [B] Impairment of goodwill [C] Total operating expenses [D] (Loss) on sale of PPE [E] Operating income [F] Other income (expense): Interest revenue [G] Interest expense [H] Gain on early extinguishment of bonds 357 Gain on sale of investment 4,000 Net income [I] Basic EPS [J] Diluted EPS [K]
Please refer to the instructions and the table in this question. Enter the correct journal entry for part [A] in the following Balance Sheet and Income Statement for 20X2. Note that for the purpose of preparing the Balance Sheet at the end of each year:
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For investments, you need to classify whether they are current assets (i.e., short-term investment) or non-current assets (i.e., long-term investment);
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For bonds, you need to determine what portion of the bonds payable is current liability and what portion is non-current liability. Current portion of the bonds payable is the principal payment portion of the cash interest payments in the next year. Non-current portion is the remaining amount of the bonds payable; and
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For leases (as the lessee), you need to determine what portion of the lease obligation is current liability and what portion is non-current liability. Current portion of the lease obligation is the principal payment portion of the cash lease payment in the next year (i.e., the amortization amount of the lease obligation in the next year). Non-current portion is the remaining amount of the lease liability.
Project 3.2 Balance Sheet
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Illini Company, Inc. |
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Income Statement |
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For the Year Ended December 31, 20X2 |
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Sales |
$1,200,000 |
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Cost of sales (inventory/equipment) |
820,000 |
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Gross profit |
380,000 |
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Operating expenses: |
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Insurance expense |
6,000 |
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Utility expense |
30,000 |
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Rent expense |
20,000 |
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Compensation expense |
110,000 |
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Bad debt expense |
6,350 |
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Depreciation expense |
38,090 |
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Maintenance expense |
1,000 |
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Warranty expense |
25,000 |
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Rental expense (lease) |
[A] |
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Pension expense |
[B] |
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Impairment of goodwill |
[C] |
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Total operating expenses |
[D] |
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(Loss) on sale of PPE |
[E] |
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Operating income |
[F] |
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Other income (expense): |
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Interest revenue |
[G] |
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Interest expense |
[H] |
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Gain on early extinguishment of bonds |
357 |
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Gain on sale of investment |
4,000 |
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Net income |
[I] |
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Basic EPS |
[J] |
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Diluted EPS |
[K] |
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