Completing a
Carlos Ramirez and Camila Garza organized New World Book Store as a corporation; each contributed $80,000 cash to start the business and received 4,000 shares of common stock. The store completed its first year of operations on December 31 current year. On that date, the following financial items for the year were determined: December 31, current year, cash on hand and in the bank, $75,600: December 31, current year, amounts due from customers from sales of books, $39,000: unused portion of store and office equipment, $73,000: December 31, current year, amounts owed to publishers for books purchased, $ 12,000; one-year note pay able to a local bank for $3,000. No dividends were declared or paid to the stockholders during the year.
Required:
- 1. Complete the following balance sheet as of the end of the current year.
- 2. What was the amount of net income for the year? (Hint: Use the
retained earnings equation | Beginning Retained Earnings + Net Income − Dividends = Ending Retained Earnings] to solve for net income.)
Assets | Liabilities | ||
Cash | $ | Accounts pay able | $ |
_______ | Note payable | _______ | |
Store and office equipment | _______ | Interest payable | 300 |
Total liabilities | $ | ||
Stockholders’ Equity | |||
Common stock | |||
Retained earnings | 12,300 | ||
Total stockholders' equity | _______ | ||
Total assets | $ | Total liabilities and stockholders' equity | $ |
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Financial Accounting
- Before issuing a report on the compilation of financial statements of a non-public entity, the accountant should: a. Apply analytical procedures to selected financial data to discover any material misstatements. b. Corroborate at least a sample of the assertions management has embodied in the financial statements. c. Inquire of the client's personnel whether the financial statements omit substantially all disclosures. d. Read the financial statements to consider whether the financial statements are free from obvious material errors.arrow_forwardFinancial Accounting Question please answer do fastarrow_forwardFinancial accounting questionsarrow_forward
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