ADRIANO, Glecy ABM 21

CAÑADA, Lyka Joyce

PRACTICE

1. Using the following (scrambled) accounts, prepare a balance sheet for ABC, a
retail company, for the year ending in December 31, 20xx. Assume that these are
the only Balance Sheet Accounts

Balance Sheet
ABC, Incorporated
December 31, 20xx

Cash 23,000
Gross accounts receivable 40,000
Allowance for doubtful accounts (2,000)
Net accounts receivable 38,000
Inventories 54,000
Current Assets 115,000
Gross fixed assets 486,000
Accumulated depreciation (51,000)
Net fixed assets 435,0000
Total assets 550,000

Short-term bank loan (notes payable) 18,000

Accounts payable 39,000
Accrued expenses 8,000
Current portion of L.T. Debt 6,000
Current Liabilities 71,000
Long term debt 210,000
Total Liabilities 281,000
Common stock (P0.20 par) 45,000
Additional paid-in capital 86,000
Retained earnings 138,000
Total liabilities and equity 550,000

2. Prepare a multi-step income statement for the retail company, ABC, for the year
ending December 31, 20xx given the information below:
ADRIANO, Glecy ABM 21
CAÑADA, Lyka Joyce

Income Statement
The ABC Company
For the 12 month period Ending December 31, 2014

Net Sales 3,162,000

Cost of goods sold 2,433,000
Gross profit 729,000
Operating expenses (excluding depreciation) 417,000
Depreciation 78,000
Operating profit 234,000
Interest expense 64,000
Earnings before taxes 170,000
Taxes 51,000
Net Income 119,000

EVALUATION (Quiz)
1. Indicate whether the following items would appear on the income statement (IS), or
balance sheet (BS).

A. (BS) - Office Supplies

B. (BS) - Accounts Payable
C. (BS) - Computer Equipment
D. (IS) - Commission Fees Earned
E. (IS) - Salaries Expense
F. (BS) - B. So, Capital
G. (BS) - Accounts Receivable
2. Using the following accounts from the retail store, A-Mart Incorporated’s income
statement for the year ending in December 31, 20xx, answer the questions below. Note
that all figures are in millions.
ADRIANO, Glecy ABM 21
CAÑADA, Lyka Joyce

A. A-Mart’s gross profit is PHP 400.

B. A-Mart’s operating profit is PHP 150.
C. A-Mart’s net profit is PHP 115.

Using the following accounts from the A-Mart, Incorporated’s balance sheet for the year
ending December 31, 20xx, answer the questions below. Use cash as a plug figure.
Note that all figures are in millions.

A. A-Mart’s current assets are PHP 410.

B. A-Mart’s current liabilities are PHP 210.
C. A-Mart’s total assets are PHP 1,410.
D. A-Mart’s total liabilities are PHP 810.
E. A-Mart’s total stockholder’s equity is PHP 600.