Look carefully it has two sets of data listed below
The objective is to test student skills in using the given financial data to prepare a comprehensive balance sheet and multi-step income statement in good form .The given financial data will be comprised of all the various subgroupings that are reported in a multi-step income statement and balance sheet (operating revenues and expenses, other revenues and expenses and irregular items, current assets, investment, fixed assets, intangibles, current liabilities, long-term liabilities, and the equity sections).
- Read the given financial data of New York Traders Inc.
- Determine which accounts belong to the balance sheet and which accounts belong to the income statement.
- Determine to which subgroup of balance sheet or income statement each account belongs.
- Compute the correct account balances that should be reported in balance sheet and correct amounts of revenues and expenses that should be reported in income statement.
- Arrange the accounts in proper order and functionality.
- Prepare a comprehensive balance sheet in good form. MUST SHOW COMPUTATION
- Prepare a multi-step income statement in good form. MUST SHOW COMPUTATION
Financial Data of New York Traders Inc. as of January 1, 2016
|Additional Paid-In Capital
|Allowance for Doubtful Accounts
|Building and Equipment
|Customer Deposits (expected to be paid in 2017)
|Income Taxes Payable
|Long-term Investments in Warren Co.
|Deposits With Vendors
|Mortgage Payable ($2,780 per month)
|2% Notes Payable to Banks ( due 2017)
|Notes Receivable (due 2017)
|Twenty-year, 12% Bonds, Due 1/1/2020
Financial Data of New York Traders Inc. for the Year 2016
||Finished Goods inventory purchased from suppliers on account.
2/10/2016 10,000 units @ $26 each
6/12/2016 15,000 units @ $28 each
10/23/2016 12,000 units @ $29 each
11/25/2016 8,000 units @ $30 each
New York Traders Inc. uses periodic inventory system and LIFO costing method. All purchases and sales are made on account.
||Payments made to suppliers on account during 2016 are $1,124,450.
||Sales made to customers on account are 49,356 units @ $36 each
||Cash collected from customers during 2016 is $1,750,700
||Total Interest paid on Notes Payable and Bonds Payable amounted to $17,415
||Rental Income on property leased out $ 25,650
||New York Traders Inc. was operating a retail store at Chicago. Original cost of building and equipment was $120,000 with a book value of $95,000. During 2016 New York Traders disposed of this store at a loss of $35,800.
||New York Traders Inc. wants to make an allowance for doubtful debts at 2% on accounts receivable for the year 2016.
||Selling and Administrative expenses are $128,475. These expenses include $56,000 depreciation expense on Building and Equipment but exclude bad debts expenses.
||Income Tax Expense paid is $90,500. New York Traders Income Tax Rate for 2016 is 30%.
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