As the accountant for Innovation, Inc. it is your job to prepare the company's INCOME STATEMENT and BALANCE SHEET. Use the accounts listed below to construct the state- ments. Assume that the tax rate is 33 percent. List of Accounts for Innovation, Inc. Accounts Receivable $30,000 Land $275,000 Notes Receivable $11,000 $10,000 $8,000 Insurance Expense SAccounts Payable Interest Expense Common Stock $5,000 $320,000 Net Sales $180,000 $21,500 $148,500 Ending Inventory Notes Payable (Long Term) Beginning Inventory Retained Earnings Advertising Expense Cash Marketing Salaries Notes Payable (Current) Merchandise Purchased $26,000 $245,000 $15,000 $20,000 $35,000 $3,500 $55,000 Buildings $250,000 Rent $2,500 Utilities $1,500 $115,000 Equipment & Vehicles $15,000 Goodwill Bonds Payable $12,500 Innovation, Inc. Income Statement Innovation, Inc. Balance Sheet REVENUES Net Sales s ASSETS Current Assets Fixed Assets Other Assets TOTAL ASSETS 16. A) $75,200 B) $82,500 17. A) $530,000 B) S640,000 18. A) $15,000 B) S.6,500 $ S COST OF GOODS SOLD Beginning Inventory Merchandise Purchased Cost of Goods Available for Sule Less: Eading lovestory Cost of Goods Sold S 5 10. Al 582.000 B) 581,000 S S LIABILITIES & OWNER' EQUITY Current Liabilities Long-Term Liabilities Owner's Equity 19. A) 513,200 B) S11,500 20. A SLSL000 B) S106,000 21. Al $565.000 B) S435,000 GROSS PROFIT (GROSS MARGIN) S 11. A) SI12,5X) B) $120,500 TOTAL LLABILITIES & OWNER'S EQUITY OPERATING EXPENSES Marketing Expenses Marketing Salncies Advertising Total Marketing Expenses Compute the set income, using FIFO and LIFO and the following information: Beginning Inventory 26,000 units @ $25.00 Purchases (now inventory 26,000 units $30.00 Sales: 26.000 units @ $65.00 Tax Ratc 33% FIFO LIFO REVENCE (22) (22) General Expenses Insurance Expense S Interest Expense Reat Utilities Total General Expenses COST OF GOODS SOLI) (24) Tatal Operating Expenses S 12. A) $19,000 BI $22.000 S 13. AJ $68,(XIO 13) $69.CICIO S INCOME BEFORE TAXIS (25) (26) NET PROFIT (INCOME) BEFORE TAXES TAXES or 33% (27) (28) Less: Income Tax Expease S 14. AS15,995 B $16.995 NET INCOME (29) NET INCOME (PROFIT) AFTER TAXES S 15. AJ $35.XIO H) 884.50SInstant Answers: Step-by-Step Explanations
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