Reference no: EM133008393
Problem 1: Various balance sheet and statement of earnings accounts for Home Restoration Outlet Ltd. are listed below in random order. The balance sheet accounts are as at December 31, 2005, except as noted. The statement of earnings amounts are for the year January 1 to December 31, 2005. All accounts are show in thousands of dollars. Prepare a statement of earnings, statement of retained earnings, and a balance sheet.
Cash $40
Retained earnings, Dec 31, 2004 $255
Inventory, Dec 31, 2004 $425
Note payable, due Feb 2006 $25
Selling expenses $482
Accounts payable $85
Accounts receivable $104
Sales $2,409
Income tax rate 50%
Building and equipment, cost $150
Dividends $70
Total Long term loan, due June 2015 $110 - 2006 portion $10 ($10 of the $110)
Purchases $1,304
Income tax payable $25
Marketable securities $30
Depreciation expense, building and equipment $23
General and administrative expenses $215
Cost of goods sold $1,419
Goodwill $85
Other expenses, interest $20
Prepaid expenses $42
Common stock $130
Accumulated depreciation, build. & equip. Dec 31, 2004 $53