1. Sherman Equipment Co. Income Satement For the Year Ending
December 31
| Sales Revenue |
|
$344,000 |
| Cost of Goods Sold |
|
$(154,000) |
| Gross Margin |
|
$190,000 |
| Operating Expense ; |
|
|
| Salaries Expenses |
$75,000 |
|
| Operating Expense |
$68,000 |
|
| Uncollectable Account Expense |
$8,700 |
$151,700 |
| Operating Income |
|
$38,300 |
| Non- Operating Items; |
|
|
| Interest Revenue |
|
$6,000 |
| Net Income |
|
$44,300 |
2. Sherman Equipment Co. Balancesheet
| Assets |
|
|
|
| Cash |
|
$48,700 |
|
| Accounts Receivable |
$62,000 |
|
|
| Less: Allowance for doubtful accounts |
$(8,400) |
$53,600 |
|
| Inventory |
|
$98,900 |
|
| Interest Receivable |
|
$2,100 |
|
| Prepaid Rent |
|
$13,100 |
|
| Supplies |
|
$1,800 |
|
| Note Receivable |
|
$30,000 |
|
| Land |
|
$46,000 |
|
| Total Asset |
|
|
$294,200 |
| Liabilities and Stockholders Equity |
|
|
|
| Current Liabilities; |
|
|
|
| Accounts Payable |
|
$52,000 |
|
| Salaries Payable |
|
$18,000 |
|
| Total Liabilities |
|
|
$70,000 |
| Stockholders Equity |
|
|
|
| Common Stock |
|
$100,000 |
|
| Retained Earnings |
|
$124,200 |
|
| Total Stockholders Equity |
|
|
$224,200 |
| Total Liabilities and Stockholders Equity |
|
|
$294,200 |
Retained Earnings
= $84,000 + $44,300-$4,100 = $ 124,200
