On December 1, 2022, Sheridan Distributing Company had the following account balances. Debit Credit Cash $7,500 Accumulated Depreciation—Equipment $2,640 Accounts Receivable 4,900 Accounts Payable 4,500 Inventory 12,200 Salaries and Wages Payable 1,000 Supplies 1,300 Owner’s Capital 44,160 Equipment 26,400 $52,300 $52,300 During December, the company completed the following summary transactions. Dec. 6 Paid $1,800 for salaries and wages due employees, of which $800 is for December and $1,000 is for November salaries and wages payable. 8 Received $1,900 cash from customers in payment of account (no discount allowed). 10 Sold merchandise for cash $6,500. The cost of the merchandise sold was $3,900. 13 Purchased merchandise on account from Boehm Co. $9,000, terms 2/10, n/30. 15 Purchased supplies for cash $1,600. 18 Sold merchandise on account $12,800, terms 3/10, n/30. The cost of the merchandise sold was $8,300. 20 Paid salaries and wages $1,700. 23 Paid Boehm Co. in full, less discount. 27 Received collections in full, less discounts, from customers billed on December 18. 1.Prepare an income statement. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) 2.Prepare an owner’s equity statement for December. 3. Prepare a classified balance sheet at December 31. (List Current Assets in order of liquidity.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On December 1, 2022, Sheridan Distributing Company had the following account balances.

	Debit		Credit
Cash	$7,500	Accumulated Depreciation—Equipment	$2,640
Accounts Receivable	4,900	Accounts Payable	4,500
Inventory	12,200	Salaries and Wages Payable	1,000
Supplies	1,300	Owner’s Capital	44,160
Equipment	26,400
	$52,300		$52,300

During December, the company completed the following summary transactions.

Dec. 6		Paid $1,800 for salaries and wages due employees, of which $800 is for December and $1,000 is for November salaries and wages payable.
8		Received $1,900 cash from customers in payment of account (no discount allowed).
10		Sold merchandise for cash $6,500. The cost of the merchandise sold was $3,900.
13		Purchased merchandise on account from Boehm Co. $9,000, terms 2/10, n/30.
15		Purchased supplies for cash $1,600.
18		Sold merchandise on account $12,800, terms 3/10, n/30. The cost of the merchandise sold was $8,300.
20		Paid salaries and wages $1,700.
23		Paid Boehm Co. in full, less discount.
27		Received collections in full, less discounts, from customers billed on December 18.

1.Prepare an income statement. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

2.Prepare an owner’s equity statement for December.

3. Prepare a classified balance sheet at December 31. (List Current Assets in order of liquidity.)

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