Income Statement Year 2 Sales Revenue Less: Cost of Goods Sold Gross Margin $ Less: Expenses Sales & Marketing Operating Costs Wages Research & Development Expense Advertising Expense Depreciation Expense Interest Expense Total Operating Expenses Net Income (Loss) %24 %24 %24 Balance Sheet Equity APIC Events Assels Liab Acct Payable Div Payable Notes Payable Cash 257.000.00 S Acct Rec 17,500.00 $ Inventory 28.000.00 Common Stock 200,000.00$ Equipment Land 50,000.00 | $ |Accum Depr 8,333.00 $ Wages Payable Retahed Earnings 176,167.00 Account Titles for Retained Earnings Building 250.000.00-| Beginning Balances as of Dec 31, Year 1 118,000.00 100,000.00 $ 500,000 1.Acquired $550,000 by signing a note payable with a local bank 2. Sold 25.000 shares of $22 Common Stack for $1,500,000 3. Purchased Equipment for $300.000 4. Purchased Inventory on Account - 25,000 Units at $1.15 per unit Sa. Sold 15,000 units at $3.50 on Account 5b. COGS for Sales on AccoLnt 6. Collect $70,000 on Account 7. Paid $117,250 of Accounts Payable 8. Purchased Inventory on Account - 170.000 Units at $1.50per unit 9a. Sold 175,000 units at $3.50 on Account 9b. COGS for Sales on Account 10. Collect $472,500 on Account 11. Paid $218.600 of Accounts Payable 12. Purchased Inventory on Account- 275,000 Units at $1.35 per unit 13a. Sold 200,000 units at $3.50 on Account 13b. COGS for Seles on Account 14. Collect $735,000 on Account 15. Paid $494.150 of Accounts Payable 16. Purchased Inventory on Account- 300.000 Units at $1.15per unit 17. Paid Sales & Marketing Expenses of $30,000 18. Paid Operating Expenses of $75.708 19. Record Wages Payable of $40.000 20. Paid Product Line Research & Development Expenses of $150,000 21. Paid Advertising Expenses of $87.500 500.000 550.000 S 1,500,000 (300,000) 950,000 300.000 28,750 28,750 52.500 52.500 Sales Revenue (17,250) (17.250) Cost of Goods Sold 70,000 $ (70,000) (17.250) (17.250) 178,500 178,500 612.500 (184.750) 612.500 Sales Revenue (184.750) Costs of Goods Sold 472,500 (218,600) $ (472,500) I$ (218.600.001| 371,250 371,250 700,000 700.000 (270,750) Sales Revenue (270.750) Costs of Goods Sold 735,000 $ (494,1501 (735.000) (494,150.00 345,000.00 345,000 (30,000) (75,708) (40,000) (150,000) (87,500) Marketing Expense Operating Expense Wage Expense Research & Development Expense Advertising Expense (30,000) (75,708) (40,000) (150,000) (87.5001 22. Made the yearly required payment on the note payable. The note carries a 7% interest rate and requires payments of $50.000 plus interest each December 31. (88,500) (50.000) (38,500) Interest Expense 23. Record first year of Depreciation on Equipment Purchased in Year 2 with Salvage Value of $38.000 & useful Ife of 7 Yrs 24. Declared a $10,000 cash dividend for stockholders 25. Paid a $10.000 cash dividend for stockholders Balance at end of Yr 2 37,428.57 (37,429) Depreciation Experse I$ 10,000.00 $ (10,000.00) 10,000) Dividends (10,000) 1 2,022.792 105,000 $ 478.750 300,000 s 50.000 S 250,000 - 3 45,762 3 311,500 3 450,000 750,000 $ 1,050.000 599,280 Tetalassets Tetaliabries & Eaity 3.180.780 ्रा