Question

# Edman Company is a merchandiser that has provided the following balance sheet and income statement for...

Edman Company is a merchandiser that has provided the following balance sheet and income statement for this year.

 Beginning Balance Ending Balance Assets Cash \$ 62,800 \$ 150,000 Accounts receivable 160,000 180,000 Inventory 230,000 240,000 Property, plant & equipment (net) 833,000 793,000 Other assets 37,000 37,000 Total assets \$ 1,322,800 \$ 1,400,000 Liabilities & Stockholders’ Equity Accounts payable \$ 70,000 \$ 80,000 Bonds payable 550,000 550,000 Common stock 410,000 410,000 Retained earnings 292,800 360,000 Total liabilities & stockholders’ equity \$ 1,322,800 \$ 1,400,000
 This Year Sales \$ 2,500,000 Variable expenses: Cost of goods sold 1,600,000 Variable selling expense 240,000 Total variable expenses 1,840,000 Contribution margin 660,000 Fixed expenses: Fixed selling expenses 220,000 Fixed administrative expenses 300,000 Total fixed expenses 520,000 Net operating income 140,000 Interest expense (8%) 44,000 Net income before tax 96,000 Tax expense (30%) 28,800 Net income \$ 67,200 1. Refer to the “Requirement 1 Financials” tab within your template. For this year, create formulas within column D that calculate the average balance for each balance sheet account. a. What is the average balance for the following accounts: b. What is this year’s average total liabilities and stockholders’ equity?

1. Accounts receivable _____

2. Inventory _____

3. Retained Earnings _____

4. What is this year’s average total liabilities and stockholders’ equity? ________

Since excel sheet is not given, formulas cant be formulated, but i have given solution with figures given, so in formulas refer to cells with those figures given.

a.
1. Accounts Receivable = (\$160000+180000) / 2 = \$170000
2. Inventory = (\$230000+240000) / 2 = \$235000
3. Retained Earnings = (\$292800+360000) / 2 = \$326400

b.
Average Total Liabilities = (\$70000+550000+80000+550000) / 2 = \$625000
Average Stockholder's Equity = (\$410000+292800+410000+360000) / 2 = \$736400