Reference no: EM132532761

Question 1: Prepare the income statement, statement of changes in stockholders' equity, balance sheet, and statement of cash flows for Roth Inc. for year 1.

Roth Inc. experienced the following transactions for year 1, its first year of operations:

1. Issued common stock for $50,000 cash.
2. Purchased $140,000 of merchandise on account.
3. Sold merchandise that cost $110,000 for $250,000 on account.
4. Collected $236,000 cash from accounts receivable.
5. Paid $118,000 on accounts payable.
6. Paid $50,000 of salaries expense for the year.
7. Paid other operating expenses of $28,000.

Roth adjusted the accounts using the following information from an accounts receivable aging schedule:

Number of Days

Past Due Amount Percent Likely to

Be Uncollectible Allowance

Balance Current       $10,000             0.01

0-30                      2,000                0.05

31-60                       1,200             0.10

61-90                         500             0.20

Over 90 days              300              0.50