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Accountant for donovan co

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Reference no: EM13845868

You are an accountant for Donovan Co.

  • Prepare (a) a single-step income statement, (b) a statement of owner's equity, and (c) a balance sheet in report form from the following data for Donovan Co., taken from the ledger before adjustment on December 31, 2007 [the end of their fiscal year].Make any necessary Adjusting Entries. You may create AJE's and an Adjusted Trial Balance, but they do not need to be included on your .xls product.
  • Also state the (d) Quick Ratio for 2007.The Quick Ratio for 2005 and 2006 were determined to be 1.95 and 1.93 respectively. In 2007 by comparison, is your company Improving or Declining?
  • The CFO has bet you that the income he projected last year was exactly correct - a net profit of precisely $97,000. (e) Is he right?
  • Note that Donovan Company has traditionally included expenses such as Depreciation Expense and Supplies Expense in an account simply called "Administrative Expenses".

The following unadjusted balances were available:

Accounts Payable

$  47,200

Accounts Receivable

64,300

Accumulated Depreciation - Office Equipment22750

22,250

Accumulated Depreciation - Store Equipment

62,100

Administrative Expenses75500

74,000

Al Donovan, Capital

141,750

Cash

39,700

Cost of Merchandise Sold

545,000

Al Donovan, Drawing

42,000

Interest Expense

9,000

Merchandise Inventory

93,250

Note Payable, Due 2008

50,000

Office Equipment

49,750

Prepaid Insurance

6,500

Rent Revenue

7,500

Salaries Payable

3,700

Sales (net)

820,500

Selling Expenses

101,500

Store Equipment

125,000

Office Supplies on Hand Jan 1, 20074000

5,000

 

 

 

 

 
  • Office Equipment was purchased in 2005 and Depreciated $500 in 2007.
  • Store Equipment was bought in 2004 and was Fully Depreciated under Sec 179 in that year.
  • A count of Office Supplies on Dec. 31, 2007 indicated that only $4000 of supplies remained on hand.

 

Reference no: EM13845868

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