Question

The following reflects Ace Inc.’s adjusted accounts at their normal balances for the year ended December...

The following reflects Ace Inc.’s adjusted accounts at their normal balances for the year ended December 31, 2019.

Cash

80,000

Accounts Receivable

15,000

Supplies

3,000

Inventory

150,000

Prepaid Insurance (represents 2 years)

50,000

Equipment

300,000

Accumulated Depreciation - Equipment

40,000

Land

75,000

Patent

5,000

Accounts Payable

145,000

Note Payable (due in 3 equal annual installments)

36,000

Deferred Revenue (represents 8 months)

16,000

Common Stock (50,000 shares authorized, $5 par, 20,000 shares issued and outstanding

100,000

Additional Paid in Capital

30,000

Retained Earnings

111,000

Dividends

70,000

Sales Revenue

1,360,000

Sales Discounts

60,000

Cost of Goods Sold

455,000

Wages Expense

435,000

Insurance Expense

25,000

Rent Expense

40,000

Interest Expense

10,000

Income Tax Expense

65,000

Required: Prepare a multi-step income statement, statement of retained earnings, and classified balance sheet in proper format for Ace Inc. for the year ended December 31, 2019.

Homework Answers

Answer #1
Income Statement-Ace Inc.
For the Year Ended December 31, 2019
Revenues:
Sales Revenue $1,360,000.00
Less: Sales Discount -$60,000.00
Net Sales Revenue $1,300,000.00
Less: Cost of Goods Sold $455,000.00
Gross Profit $845,000.00
Operating   Expense
Wages Expense $435,000.00
Insurance expense $25,000.00
rent Expense $40,000.00
Interest Expense $10,000.00
Total Operating expense $510,000.00
Net Income before tax $335,000.00
Less: Income Tax -$65,000.00
Net Income $270,000.00
Statement of Retained Earnings
For the Year Ended December 31, 2019
Retained Earnings, January 1, 2019 $111,000.00
Ad: Net Income For The Year $270,000.00
Less: Dividends -$70,000.00
Retained Earnings, December 31, 2019 $311,000.00
Balance Sheet- Ace
For the Year Ended December 31, 2019
Assets
Current Asset
Cash $80,000.00
Accounts Receivable $15,000.00
Supplies $3,000.00
Inventory $150,000.00
Prepaid Exepnse $50,000.00 $298,000.00
Non Current Asset
Equipment $300,000.00
Less: Accumulted Depreciaiton -$40,000.00
Land $75,000.00
Patent $5,000.00
Total Non Current Asset $340,000.00
Total Asset $638,000.00
Liabilities
Current liabilities
Accounts Payable $145,000.00
Notes Payable $12,000.00
Deferred Revenue $16,000.00 $173,000.00
Non Current Liabilities
Note Payable $24,000.00 $24,000.00
Tototal Liabilities $197,000.00
Stockholders' Equity
Common Stock $100,000.00
Additioanl Capital n Excess of par $30,000.00
Retained Earnings $311,000.00
Tototal Stockholders' Equity $441,000.00
Tototal Liabilities And Stockholders' Equity $638,000.00
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