GUITAR UNIVERSE COMPANY

Bank Reconciliation Statement

2013 December 31

Date Reference Payee/Payor Particulars Amount

2013 December
Balance per Book, beg. $ 450,000.00

Add: Receipts

Total Receipts $ -

Less: Disbursements
NSF $ 25,000.00
Bank Charge $ 250.00

Total Disbursements $ 25,250.00

2013 December
Balance per Book, End ###

2013 December
Balance per Bank $ 469,750.00

Add: Deposit in Transit

Add: Debit Memos

$ 165,000.00

Total $ 165,000.00

Less: Outstanding checks

507 $ 40,000.00
511 $ 90,000.00
521 $ 80,000.00

Less: Credit Memos

Total $ 210,000.00

2013 December
Balance per Bank, End ###

Difference PHP -
GUITAR UNIVERSE COMPANY
Trial Balance
For the Month Ended December 31, 2013

2013-Dec-31
Account Debit, UNADJ Credit, UNADJ
Cash $ 450,000
Investments in Securities $ 250,000
Accounts Receivable $ 1,250,000
Allowance for Impairment $ 50,000
Inventory $ 2,500,000
Office Supplies $ 12,000
Prepaid Insurance $ 66,000
Building and Fixtures $ 17,910,000
Accumulated Depreciation $ 8,000,000
Land $ 648,000
Accounts Payable $ 700,000
Unearned Customer Deposits $ 80,000
Income Taxes Payable $ 750,000
Share Capital $ 10,000,000
Retained Earnings $ 2,462,000
Sales $ 16,000,000
Cost of Goods Sold $ 9,580,000
Bank Service Charges $ 2,000
Impairment loss of receivable $ 90,000
Salary and wages expense $ 3,950,000
Office Supplies Expense $ 4,000
Insurance Expense $ 64,000
Utilities Expense $ 36,000
Depreciation Expense $ 480,000
Income Tax Expense $ 750,000
Other Comprehensive Income
$ 38,042,000 $ 38,042,000
 $ 38,212,000 $ 38,212,000
Adjustments 2013-Dec-31, ADJ
Debit, ADJ ENRTIES Credit, ADJ ENRTIES Debit, ADJ Credit, ADJ
$ 25,250 $ 424,750
$ 25,000 $ 275,000
$ 25,000 $ 1,275,000
$ 35,000 $ 85,000
$ 13,500 $ 2,486,500
$ 3,000 $ 9,000
$ 6,000 $ 60,000
$ 17,910,000
$ 50,000 $ 8,050,000
$ 648,000
$ 700,000
$ 32,000 $ 48,000
$ 60,000 $ 810,000
$ 10,000,000
$ 2,462,000
$ 32,000 $ 16,032,000
$ 13,500 $ 9,593,500
$ 250 $ 2,250
$ 35,000 $ 125,000
$ 3,950,000
$ 3,000 $ 7,000
$ 6,000 $ 70,000
$ 36,000
$ 50,000 $ 530,000
$ 60,000 $ 810,000
$ 25,000 $ 25,000
$ 249,750 $ 249,750 $ 38,212,000 $ 38,212,000
 $ -
$ - $ 14,953,250 $ 1,558,000 $ 13,395,250 $ 16,032,000

Adjusting Entries ASSETS LIABILITIES EQUITY REVENUE

ADJ01 $ 424,750
ADJ02 $ 275,000
ADJ01 $ 1,275,000
ADJ03 $ (85,000)
ADJ04 $ 2,486,500
ADJ05 $ 9,000
ADJ06 $ 60,000
$ 17,910,000
ADJ07 $ (8,050,000)
$ 648,000
$ 700,000
ADJ08 $ 48,000
ADJ09 $ 810,000
$ 10,000,000
$ 2,462,000
ADJ08 $ 16,032,000
ADJ04
ADJ01
ADJ03

ADJ05
ADJ06

ADJ07
ADJ09
ADJ02 $ 25,000
$ 14,953,250 $ 1,558,000 $ 12,487,000 $ 16,032,000
$ 15,123,750 $ 908,250

EXPENSES

$ 9,593,500
$ 2,250
$ 125,000
$ 3,950,000
$ 7,000
$ 70,000
$ 36,000
$ 530,000
$ 810,000

$ 15,123,750
GUITAR UNIVERSE COMPANY GUITAR UNIVERSE COMPANY GUITAR UNIVERSE COMPANY
Statement of Financial Condition Income Statement Statement of Changes in Equity
December 31, 2013 For the Year Ended December 31, 2013 For the Year Ended December 31, 2013

ASSETS Sales $ 16,032,000 Capital stock, 1/1/2013

Current Assets Cost of Goods Sold 9,593,500 Retained earnings, 1/1/2013
Cash $ 424,750 Gross margin 6,438,500 Add net income for the year
Investments in Securities $ 275,000 Less operating expenses: Add Other Comprehensive income
Accounts Receivable $ 1,275,000 Bank Service Charges 2,250 Retained earnings, 12/31/2013
Allowance for Impairment $ (85,000) Impairment loss of receivable 125,000 Total Equity, 12/31/2013
Inventory $ 2,486,500 Salary and wages expense 3,950,000
Office Supplies $ 9,000 Office Supplies Expense 7,000
Prepaid Insurance $ 60,000 Insurance Expense 70,000
Utilities Expense 36,000
Total Current Assets 4,445,250 Depreciation Expense 530,000

Noncurrent Assets
Building and Fixtures $ 17,910,000
Accumulated Depreciation $ (8,050,000) 4,720,250
Land $ 648,000 Operating income 1,718,250
Total Non-Current Assets 10,508,000 Income tax expense 810,000
TOTAL ASSETS 14,953,250 Net income $ 908,250

TOTAL LIABILITIES AND EQUITY

Liabilities
Accounts Payable $ 700,000
Unearned Customer Deposits $ 48,000
Income Taxes Payable $ 810,000
Total Liabilities 1,558,000

Equity
Share Capital 10,000,000
Retained Earnings 3,370,250
Other Comprehensive Income 25,000
Total Equity 13,395,250
TOTAL LIABILITIES AND EQUITY $ 14,953,250
-
ember 31, 2013

$ 10,000,000
$ 2,462,000
908,250
25,000
3,395,250
$ 13,395,250
-
 Financial Ratios
Gross Margin Sales $ 16,032,000
COS $ 9,593,500
Gross Margin $ 6,438,500
Gross Margin on Sales % 40%
Gross Margin on Cost % 67%

Net Income % Net Income $ 908,250

Sales $ 16,032,000

Net Income % 6%

Current Ratio Current Assets $ 4,445,250

Current Liabilities $ 1,558,000

Current Ratio 2.85

L Receivables Turnover Net Credit Sales 16,032,000

Average AR 1,190,000

Receivables Turnover 13.47

Days sales outstanding/

Days Turnover Accounts Receivable $ 1,190,000
Net Credit Sales $ 16,032,000

DSO 27

M Inventory Turnover Cost of Goods Sold 9,593,500

Average Inventories 2,486,500

Inventory Turnover 3.86

Days inventory outstanding/

Days turnover Average Inventories $ 2,486,500
Cost of Goods Sold $ 9,593,500

DIO 95
N Operating Cycle 122

Days payable outstanding AP x No. of days $ 700,000

Cost of Goods Sold $ 9,593,500

DPO 27
x 365

x 365
x 365
Trial Balance

Account Debit Credit

Accounts Payable 700,000.00
Accounts Receivable 1,250,000.00
Accumulated Depreciation 8,000,000.00
Allowance for Impairment 50,000.00
Bank Service Charges 2,000.00
Building and Fixtures 17,910,000.00
Cash 450,000.00
Cost of Goods Sold 9,580,000.00
Depreciation Expense 480,000.00
Impairment loss of receivable 90,000.00
Income Tax Expense 750,000.00
Income Taxes Payable 750,000.00
Insurance Expense 64,000.00
Inventory 2,500,000.00
Investments in Securities 250,000.00
Land 648,000.00
Office Supplies 12,000.00
Office Supplies Expense 4,000.00
Prepaid Insurance 66,000.00
Retained Earnings 2,462,000.00
Salary and wages expense 3,950,000.00
Sales 16,000,000.00
Share Capital 10,000,000.00
Unearned Customer Deposits 80,000.00
Utilities Expense 36,000.00
38,042,000.00 38,042,000.00
GUITAR UNIVERSE COMPANY GUITAR UNIVERSE COMPANY GUITAR UNIVERSE COMPANY
Statement of Financial Condition Income Statement Statement of Changes in Equity
December 31, 2013 For the Year Ended December 31, 2013 For the Year Ended December 31, 2013

ASSETS Sales Capital stock, 1/1/2013

Current Assets Cost of Goods Sold Retained earnings, 1/1/2013
Cash Gross margin - Add net income for the year
Investments in Securities Less operating expenses: Add Other Comprehensive income
Accounts Receivable Bank Service Charges Retained earnings, 12/31/2013
Allowance for Impairment Impairment loss of receivable Total Equity, 12/31/2013
Inventory Salary and wages expense
Office Supplies Office Supplies Expense
Prepaid Insurance Insurance Expense
Utilities Expense
Total Current Assets - Depreciation Expense

Noncurrent Assets
Building and Fixtures
Accumulated Depreciation -
Land Operating income -
Total Non-Current Assets - Income tax expense
TOTAL ASSETS - Net income $ -

TOTAL LIABILITIES AND EQUITY

Liabilities
Accounts Payable
Unearned Customer Deposits
Income Taxes Payable
Total Liabilities -

Equity
Share Capital
Retained Earnings
Other Comprehensive Income
Total Equity -
TOTAL LIABILITIES AND EQUITY $ -
-
ember 31, 2013

ensive income
-
$ -
-