Dawson O Connor is the owner of Miller Island Sales a

#2411
Dawson O’Connor is the owner of Miller Island Sales, a distributor of fishing supplies. The
following is the balance sheet of the company as of December 31, 2015:Dawson keeps very
few records and has asked you to help him prepare the 2016 financial statements for Miller
Island Sales. An analysis of the 2016 cash transactions recorded in the company’s checkbook
indicates deposits and checks as follows:Total deposits: $173,200; all were collections from
customers except for a long-term $10,000 bank loan.Checks written: $169,800 summarized as
follows:Inventory ................. $123,100Salaries ................. 4,250Rent ...................
4,800Equipment ............... 4,000Note payments (including interest of $650) .. 2,650Office
expense ............. 3,400Auto expense ............... 4,100Withdrawals ..............
23,500$169,800Other information about the company is as follows:1. Accounts receivable at
December 31, 2016: $ 9,200.2. Accounts payable at December 31:3. Salaries payable at
December 31, 2016, $1,800.4. Equipment is depreciated by the straight-line method over a
10-year life. The equipment purchased in 2016 was acquired on July 1. All of the equipment will
have zero salvage value at the end of its useful life.5. Interest payable at December 31, 2016:
$140.6. The company uses a periodic inventory system. Inventory at December 31, 2016:
$17,400.Required:1. Prepare a worksheet to summarize the transactions and adjustments of
Miller Island Sales for 2016.2. Prepare a 2016 income statement and a balance sheet as of
December 31, 2016.View Solution:
Dawson O Connor is the owner of Miller Island Sales a

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