S McGuire Corporation began operations in 2013. The manufacturers and then sells to retail stores. During 2013, the bookkeeper used a check register to record all cash receipts and cash disbursements. No other journals were used. The following is a recap of the cash receipts and disbursements made during the year. Cash receipts: Issue of ordinary shares Collections from customers Borrowed from local bank on April 1, note signed requiring principal and interest at 12% to be paid on March 31, 2014 Total cash receipts Cash disbursements: Purchase of merchandise Payment of salaries Purchase of equipment Payment of rent on building Miscellaneous expenses Total cash disbursements $ 50,000 320,000 40,000 $410,000 $220,000 80,000 30,000 14,000 10,000 $354,000 You are called in to prepare financial statements at December 31, 2013. The following additional information was provided to you: 1. Customers owed the company $22,000 at year-end. Of this amount, it was anticipated that $3,000 would probably not be collected. There were no actual bad debt write-offs in 2013. 2. At year-end, $30,000 was still due to suppliers of merchandise purchased on credit. 3. At year-end, merchandise inventory costing $50,000 still remained on hand. 4. Salaries owed to employees at year-end amounted to $5,000. 5. On December 1, $3,000 in rent was paid to the owner of the building used by McGuire. This represented rent for the months of December through February. 6. The equipment, which has a 10-year life and no salvage value, was purchased on January 1, 2013. Straight-line depreciation is used. Required: Prepare an income statement for 2013 and a statement of financial position as of December 31, 2013.
S McGuire Corporation began operations in 2013. The manufacturers and then sells to retail stores. During 2013, the bookkeeper used a check register to record all cash receipts and cash disbursements. No other journals were used. The following is a recap of the cash receipts and disbursements made during the year. Cash receipts: Issue of ordinary shares Collections from customers Borrowed from local bank on April 1, note signed requiring principal and interest at 12% to be paid on March 31, 2014 Total cash receipts Cash disbursements: Purchase of merchandise Payment of salaries Purchase of equipment Payment of rent on building Miscellaneous expenses Total cash disbursements $ 50,000 320,000 40,000 $410,000 $220,000 80,000 30,000 14,000 10,000 $354,000 You are called in to prepare financial statements at December 31, 2013. The following additional information was provided to you: 1. Customers owed the company $22,000 at year-end. Of this amount, it was anticipated that $3,000 would probably not be collected. There were no actual bad debt write-offs in 2013. 2. At year-end, $30,000 was still due to suppliers of merchandise purchased on credit. 3. At year-end, merchandise inventory costing $50,000 still remained on hand. 4. Salaries owed to employees at year-end amounted to $5,000. 5. On December 1, $3,000 in rent was paid to the owner of the building used by McGuire. This represented rent for the months of December through February. 6. The equipment, which has a 10-year life and no salvage value, was purchased on January 1, 2013. Straight-line depreciation is used. Required: Prepare an income statement for 2013 and a statement of financial position as of December 31, 2013.
Financial Accounting
14th Edition
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Carl Warren, Jim Reeve, Jonathan Duchac
Chapter8: Sarbanes-oxley, Internal Control, And Cash
Section: Chapter Questions
Problem 18E
Related questions
Question
Please help me
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Financial Accounting
Accounting
ISBN:
9781305088436
Author:
Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Century 21 Accounting Multicolumn Journal
Accounting
ISBN:
9781337679503
Author:
Gilbertson
Publisher:
Cengage
College Accounting (Book Only): A Career Approach
Accounting
ISBN:
9781337280570
Author:
Scott, Cathy J.
Publisher:
South-Western College Pub
Financial Accounting
Accounting
ISBN:
9781305088436
Author:
Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Century 21 Accounting Multicolumn Journal
Accounting
ISBN:
9781337679503
Author:
Gilbertson
Publisher:
Cengage
College Accounting (Book Only): A Career Approach
Accounting
ISBN:
9781337280570
Author:
Scott, Cathy J.
Publisher:
South-Western College Pub
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
Financial Accounting
Accounting
ISBN:
9781337272124
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning