Answer:
Eller Equipment Co.
Income statement
Particular Amount($) Amount ($)
Sales revenue 940,000
Less: Cost of good sold <u>(595,000)</u>
Gross margin 345,000
<u>Operating expenses</u>
Salaries expenses 122,000
Operating expenses 65,000
Warranty expenses 9,200
Un-collectible account expenses 45,000
Depreciation expenses <u>3,000</u>
Total operating expenses <u>(244,200)</u>
Operating income 100,800
<u>Non-operating expenses</u>
Interest revenue 6,200
Interest expenses (36,000)
Gain on sale of equipment 19,000
Total non-operating items <u>(10,800)</u>
Net Income <u>$90,000</u>
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Balance Sheet
Assets Amount$
<u>Current Assets</u>
Cash 41,000
Accounts receivable 108,000
Less: Allowance for doubtful (19,000) 89,000
accounts
Merchandise inventory 101,000
Interest receivable 3600
Prepaid rent 38,000
Supplies 6,500
Notes receivable <u>32,500</u>
Total current assets 311,600
Property Plant and Equipment
Equipment 243,000
Less: Accumulated depreciation <u>(66,000)</u> 177,000
Land <u>95,000</u>
Total property plant and equipment <u>272,000</u>
Total Assets <u>583,600</u>
Liabilities and Stockholder Equity
<u>Current liabilities</u>
Account payable 55,000
Unearned revenue 47,000
Warranties payable 6,500
Interest payable 6,000
Salaries payable <u>68,000 </u>
Total current liabilities 182,500
<u>Long-term liabilities</u>
Notes payable 160,000
Total long-term liabilities 160,000
<u>Stockholders equity</u>
Common stock 110,000
Retained earning 131,100
Total stockholders equity <u>241,100</u>
Total liabilities and stockholders equity <u>$583,600</u>
<u>Workings</u>
Retained earning = Beginning retained earning + Net income - Dividend
= 61,100 + 90,000 - 20,000
= 131,100
