The hypothetical company XYZ Inc started its operations in 2020. On December 31 2020, it had the following adjusted trial balance:
The hypothetical company XYZ Inc started its operations in 2020. On December 31 2020, it had the following adjusted
|
Account |
Balance ($) |
|
Notes Payable |
20,000 |
|
Wages Payable |
8,000 |
|
Additional Paid In Capital |
300,000 |
|
Common Stock at par value |
60,000 |
|
A/P |
60,000 |
|
PP&E (at cost) |
110,000 |
|
Inventory |
62,000 |
|
Cash |
419,000 |
|
Unearned Revenues |
10,000 |
|
Accumulated |
10,000 |
|
|
? |
|
|
230,000 |
|
|
|
During 2021 the following transactions occurred:
- A dividend of $20,000 was declared during 2021. These dividends will be paid in 2022.
- During the year the company performed and delivered services and billed its clients for $900,000. Collections from customers were $800,000.
- In addition to the transactions described in items 3 above, products were shipped to the customers who paid $10,000 in advance (see December 31, 2020 balances). The selling price was $80,000 and the customer paid the balance in 2021.
- The company purchased $350,000 worth of inventory, on account. Payments on accounts payable were $200,000.
- Miscellaneous expenses in the amount of $24,000 were paid in cash
- Based on a physical count, inventory balance as of December 31, 2020 was $71,000.
- The employees earned $200,000 as wages. Cash wage payments to employees were $190,000.
- Additional PP&E worth $30,000 was purchased in cash. Depreciation for the year equals $10,000.
- 10,000 shares at par value of $1 were issued and sold for $20 per share.
- The note worth of $20,000 was paid with an additional Interest expense of $200.
- The company incurred $24,000 in rent expenses and paid $22,000 of it.
- The company calculated its tax obligations for 2021. Tax in the amount of $40,000 is due for the entire year of which $30,000 was paid in the previous quarters of 2021.
Prepare the Balance Sheet as of December 31, 2021
Cash
Inventories
Account Receivables
PP&E
Accumulated Depreciation
TOTAL ASSETS
Accounts Payable
Wages Payable
Rent Payable
Taxes Payable
Dividends Payable
TOTAL LIABILITIES
Common Stock at par
Additional Paid In Capital
Retained Earnings
TOTAL EQUITY
TOTAL LIABILITIES + EQUITY
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