Final Exam Financial statement

Topics: Generally Accepted Accounting Principles, Balance sheet, Asset Pages: 3 (282 words) Published: January 4, 2015

Cartell Paper Products

Balance Sheet

31-Dec-12

Debit
Credit
Cash
 
$4,600
 
Accounts Receivable
 
9,600
 
Inventory 1.1.2012
 
10,000
 
Supplies
 
1,200
 
Prepayment
 
2,000
 
Equipment - Cost
 
71,000
 
Equipment - Accumulated Depreciation
 
 
26,500
Patent
 
7,100
 
Accounts Payable
 
 
$6,100
Interest Payable
 
 
800
Taxes Payable
 
 
2,300
Bonds Payable
 
 
20,300
Common Stock
 
 
22,700
Retained Earnings at 1.1.2012
 
 
13,200
Sales
 
 
$147,600
Purchases
 
71,300
 
Wage Expense
 
$37,900
 
Supply Expense
 
3,600
 
Insurance Expense
 
2,400
 
Rent Expense
 
5,400
 
Interest Expense
 
2,600
 
Income Tax Expense
 
10,800
 

$239,500
$239,500
Note: Adjustments are required for the following:-

1
Inventory at 31.12.2012 amounts to $17,500
2
Equipment is depreciated on the straightline at 5% per annum 3
Patent is to be amortized by $1,100 for the year 2012
4
Wages of $2,200 is accrued at 31.12.2012
5
Prepayment represents insurance paid for 10 months to 31.7.212 6
Dividend proposed of $5,000

REQUIRED:-

1
Prepare the income statement for the year ended 31.12.2012
2
Statement of movement of shareholders fund for the year ended 31.12.2012 3
Statement of financial position at 31.12.2012 (Balance sheet)

SOLUTION

Cartell Paper Products
Income Statement
For the Year Ended December 31, 2012

Sales $147,600
Cost of Goods Sold
Opening inventory10,000
Add: Purchases71,300
81,300
Less: Closing Inventory17,500
63,800
Gross Profit 83,800
Less Operating Expenses:
Wage Expense (37900 + 2200)$ 40,100
Supply Expense 3,600
Insurance Expense (2400 + 2000 x 3mth/10mth)3,000
Depreciation Expense (71000 x 5%)3,550
Amortization Expense 1,100
Rent Expense 5,40056,750
Operating Income (Profit before Income and taxes)26,700
Interest Expense 2,600
Income...
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