Reference no: EM132770993
Question - X operates a retail store in which it sells household appliances. X's ledger had the following account balances as of January 1, 2019:
Cash 230,000
Accounts Receivable 350,000
Inventory 300,000
Prepaid Rent 60,000
Equipment 600,000
Accumulated Depreciation - Equipment 150,000
Accounts Payable 130,000
Salaries Payable 10,000
Dividends Payable 15,000
Capital Stock 850,000
Retained Earnings 385,000
The company had the following transactions in 2019:
1. Sales on account, 2,500,000.
2. Collection from customer accounts, 2,400,000.
3. Purchase of merchandise, on account, 1,600,000.
4. Cost of merchandise sold, 1,550,000.
5. Salaries earned by employees, 380,000.
6. Salaries paid to employees, 385,000.
7. Cost of other services purchased on account and used, 130,000.
8. Payments to suppliers of other merchandise purchase on account, 1,450,000.
9. Payments to the owner of the building in which X was located, for the right to use store premises for one year (from July 1, 2019 to June 30, 2020), 132,000. (Fixed rental cost per month.)
10. Rental costs applicable to 2019 (to be calculated). The beginning balance in Prepaid Rent was the rent for six months ending June 30, 2019.
11. Delivery vans purchased for cash 80,000. The company classify delivery vans as equipment.
12. Depreciation on equipment, 40,000.
13. Dividends declared, 80,000.
14. Dividends paid, 75,000.
Requirements -
1. Prepare the balance sheet for January 1, 2019.
2. Make an unadjusted trial balance.
3. Make an Income statement for the year 2019.
4. Make a Balance sheet as of Dec 31, 2019.