Reference no: EM133102045

Question - Towner Electrical Supply Company - Towner is taxed at the rate of 30% of its Net Income Before Taxes.

During 2013, Towner sold 50,000 units of its one and only product for $40 each.

Some customers made their purchase on credit. Of these, $300,000 is still owed to us. After analyzing the list of customers, Towner feels that $40,000 of this amount is uncollectible.

Utilities for the past year were $15,800.

Towner began 2013 with $246,000 of inventory. During 2013 they purchased $1.5 million more.

The building owned by Towner was purchased in 2003 for $1,000,000. At that time it was estimated to have a useful life of 40 years. Towner uses the straight-line method of depreciation.

Towner makes all of its sales through the mail or online, so there is no need for them to have cash in the building. All the company's cash is kept at the bank in savings and checking accounts. As of December 31, 2013, the balance in all of these accounts totaled $381,000.

While their charter authorizes Towner to have a maximum of 500,000 shares of their $10 par value stock, they have only issued 100,000 shares.

There were no expenses or income in 2013 that would be considered "other".

A physical count of inventory was taken on December 31, 2013 and $546,000 of inventory was on hand.

Towner has $55,000 in unpaid bill as of December 31, 2013, not including their mortgage which has a balance of $627,000.

The staff of Towner consists of six employees with a combined annual salary of $420,000.

Towner has machinery and equipment that was bought for $500,000 but now has a book value of $384,000. The 2013 depreciation on the machinery and equipment was $11,000.

Past profits have been used to pay dividends to the stockholders. After paying the dividends, the remaining profits, $639,000, have been retained in the business.

Use the above information to prepare an Income Statement and Balance Sheet for Towner Electrical Supply Company.