The company uses the periodic inventory system. A physical count of inventory on December31 resulted in an inventory amount of $50,000.
Instructions
1. Prepare an income statement for the year ending December 31, 2019. Assume that twenty thousand shares of common stock were outstanding the entire year. (12 Marks)
a. using the Multi-Step form.
b. using the Single-Step form.
2. Prepare a retained earnings statement for the year ending December 31, 2019.
(4 Marks)
3. Prepare a Statement of Financial Position as at December 31, 2019. (12 Marks)
a. Report Form
b. Account Form
4. Calculate Earnings Per Share for the year ending December 31, 2019. (2 Marks)
----------END OF TASK-2----------
1
1
DebitsCredits
Sales- 1,533,600
Notes Receivable128,000 -
Investments (short Term)141,600 -
Accounts Payable- 81,600
Accumulated Depreciation—Equipment- 49,600
Sales Discounts16,800 -
Sales Returns28,000 -
Purchase Discounts- 12,800
Cash304,000 -
Accounts Receivable206,400 -
Rent Revenue- 22,400
Retained Earnings- 384,000
Salaries Payable- 35,200
Notes Payable- 120,000
Common Stock, $15 par- 480,000
Income Tax Expense108,800 -
Cash Dividends Declared112,000 -
Allowance for Doubtful Accounts- 10,400
Supplies on Hand17,600 -
Freight-In25,600 -
Short term Investment80,000 -
Freight-out24,000 -
Sales commission339,200 -
Correction for understatement of prior period net income (inventory error)- 80,000
Other Operating Expenses (30% Selling, 70% Administrative)182,400 -
Land104,000 -
Provision for Bad and Doubtful Account- 54,400
Equipment208,000 -
Merchandise Inventory126,400 -
Building166,400 -
Purchases800,000 -
Dividend Income- 40,000
Loss on Sale of Investment20,800 -
Interest Revenue- 14,400
Interest Expense20,000 -
Bonds Payable- 160,000
Gain on Sale of Land- 39,200
Accumulated Depreciation—Building32,000
Accumulated Depreciation—Land- 10,400
Totals3,160,000 3,160,000
Smart Corporation
ADJUSTED TRIAL BALANCE
December 31, 2019
Numan
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