Preparation of Financial Statements
Preparation of Financial Statements
Assets
Current Assets
Cash 2,950,000
Accounts Receivable 575,000
Office Supplies 40,000
Prepaid Insurance 240,000
Total Current Assets 3,805,000
Noncurrent Assets
Equipment 2,500,000
Accumulated Depreciation-Equipment -35000 2,465,000
Total Noncurrent Assets 2,465,000
Total Assets 6,270,000
Liabilities
Current Liabilities
Accounts Payable 28,000
Salaries Payable 420,000
Unearned Lawn Mowing Revenue 100,000
Total Liabilities 548,000
Stockholders' Equity
Common Stock 5,000,000
Ending Retained Earnings 722,000
Total Stockholder's Equity 5,722,000
Total Liabilities and Stockholders' Equity 6,270,000
Activity 2: The following is the adjusted trial balance data for Emma’s Alterations as
of December 31, 2019.
A. Use the data provided to compute net sales for 2019. = 276,647
B. Compute the gross margin for 2019. = 186, 314
C. Compute the gross profit margin ratio. = 67.35%
D. Prepare a simple income statement for the year ended December 31, 2019.
Emma's Alterations
Income Statement
Year Ended December 31, 2019
E. Prepare a multi-step income statement for the year ended December 31, 2019.
Emma's Alterations
Income Statement
Year Ended December 31, 2019
Sales 276,647.00
Cost of goods sold (90,333.00)
Gross Profit 186,314.00
Operating expenses
Selling expenses
Non-Operating or other
A. Use the data provided to compute net sales for 2019. = 393,491.00
B. Compute the gross margin for 2019. = 212,861.00
C. Compute the gross profit margin ratio = 54.10%
D. Prepare a simple income statement for the year ended December 31, 2019.
Elm Connections
Income Statement
Year Ended December 31, 2019
E. Prepare a multi-step income statement for the year ended December 31,
2019.
Elms Connections
Income Statement
Year Ended December 31, 2019
Sales 393,491.00
Cost of goods sold (180,630.00)
Gross Profit 212,861.00
Operating expenses
Selling expenses
Non-Operating or other
Activity 4: Following is the adjusted trial balance data for Garage Parts Unlimited
as of December 31, 2019.
A. Use the data provided to compute net sales for 2019. = 610,501
B. Compute the gross margin or 2019. = 402,485
C. Compute the gross profit margin ratio = 65.93 %
D. Prepare a simple income statement for the year ended December 31, 2019.
Garage Parts Unlimited
Income Statement
Year Ended December 31, 2019
E. Prepare a multi-step income statement for the year ended December 31,
2019.
Garage Parts Unlimited
Income Statement
Year Ended December 31, 2019
Sales 610,501.00
Cost of goods sold (208,016.00)
Gross Profit 402,485.00
Operating expenses
Selling expenses
Non-Operating or other