Reference no: EM131001837

Holmes Inc. 

             Balance Sheet              

June 30, 2015 

 

ASSETS                                                         LIABILITIES

Cash                              $50,000                   Accounts Payable                  $ 50,000

Accounts Rec.                 10,000                     Mortgage Payable                   150,000

Inventory                        40,000              

Supplies                            4,000                 TOTAL LIABILITIES                $200,000

Land                                66,000

Buildings        200,000                                   STOCKHOLDER EQUITY

Acc. Depr.     <60,000>  140,000         

Equipment      180,000                                     Common Stock  $3 Par        $30,000

   Acc. Depr   <80,000>  100,000                       Retained Earnings               180,000

                                                                 TOTAL EQUITY                    $210,000

 

TOTAL ASSETS        $410,000                         TOTAL LIAB. & EQUITY             $410,000 

 

July 1              Sold 200,000 shares of common stock for $1,800,000. 

July 3              Purchased on account $80,000 of inventory for resale to customers. Terms granted to Holmes Inc. were 10/60 net 90 days. 

July 5              Purchased a 3-year insurance policy for $6,000 in cash.  The effective date of this insurance contract is July 1, 2015. 

July 7              Returned $20,000 of purchases acquired July 3. 

July 10            Sales revenue generated was $400,000.  $10,000 in cash received this   date the balance on account.  Terms 4/60 net 90 days. 

July 29            Paid $20,000 in wages. 

July 29            Paid $5,000 July monthly mortgage payment.  The rate of interest is  9% per year.

Aug.1              Acquired $200,000 of equipment.  Useful life is 10 years.  Signed a note (9%) for the full amount of this acquisition. 

Aug. 2             Customers returned $30,000 of items purchased by them on July 10.

Aug. 3             Sold 100,000 shares at $7 per share and all cash received this date. 

Aug. 10           Holmes paid in full the account balance due from the July 3rd purchase. 

Aug. 19            Borrowed $80,000, and signed a note for this amount at 12%. Loan  payments are made yearly. 

Aug. 21            Declared a dividend of $1.50 per share. 

Aug. 10           Received full amount due from the July 10 sale. 

Aug. 28           Made the August mortgage payment of $5,000. 

Aug. 29           August wages paid $20,000. 

Aug. 30           Paid in cash $3000 on the equipment note entered into on August 1. 

Sept.  15          Acquired $60,000 of inventory for cash. Terms were 9/90 net 190 days.   

Sept.  18          Supply inventory valued at $600. 

Sept.  23          Sales to customers amounted to $135,000.  Terms 6/30 net 90 days. This was a cash sale. 

Sept. 29           Made the monthly mortgage payment of $5,000 

Sept . 30          Sold the equipment listed on the 6/30/15 balance sheet.  The sale price was $120,000 and cash was received this date for the entire amount. 

Sept. 30           End of the quarter inventory was valued at $35,000. 

Sept. 30           September wages of $20,000 were accrued.

OTHER INFORMATION

1.  Tax rate is 20%. 

2.  Building has a 20 year useful life from date of purchase. 

3.  All equipment has a useful life of ten years. 

PREPARE A SET OF FINANCIAL STATEMENTS {Income Statement & Statement of Retained Earnings & Balance Sheet} for the Quarter ending 9/30/15