FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Preparing the statement of
Boundary Rare Coins (BRC) was formed on January 1, 2018. Additional data for the year follow:
a. On January 1, 2018, BRC issued no par common stock for $475,000.
b. Early in January, BRC made the following cash payments:
- For store fixtures, $53,000
- For merchandise inventory, $260,000
- For rent expense on the store building, $13,000
c. Later in the year, BRC purchased merchandise inventory on account for $240,000. Before year-end, BRC paid $160,000 of this accounts payable.
d. During 2018, BRC sold 2,200 units of merchandise inventory for $450 each. Before year-end, the company collected 85% of this amount Cost of goods sold for the year was $330,000, and ending merchandise inventory totaled $170,000.
e. The store employs three people. The combined annual payroll is $80,000, of which BRC still owes $4,000 at year-end.
f. At the end of the year, BRC paid income tax of $24,000. There are no income taxes payable.
g. Late in 2018, BRC paid cash dividends of $40,000.
h. For store fixtures, BRC uses the
Requirements
- Prepare BRC’s income statement for the year ended December 31, 2018. Use the single-step format, with all revenues listed together and all expenses listed together.
- Prepare BRCs
balance sheet at December 31, 2018. - Prepare BRC’s statement of cash flows for the year ended December 31, 2018. Format cash flows from operating activities by the direct method.
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