Question

SPRING TRAINING INC.  

Balance Sheet                            

December 31, 2017

ASSETS                                                         LIABILITIES

Cash                              $25,000             Accounts Payable                 $50,000

Accounts Rec.                   5,000             Mortgage Payable                 50,000

Inventory                        14,000              

Supplies                            2,000             Total Liabilities                                  $100,000

Land                                18,000

Buildings      $220,000                             STOCKHOLDER EQUITY

    Acc. Depr. <20,000> 200,000          

Equipment     200,000                             Common Stock $5 Par      $30,000

    Acc. Depr <14,000> 186,000             Excess of Par                     $300,000

                                                                  Retained Earnings               20,000

                                                            

      Total Equity                                     $350,000

TOTAL ASSETS        $450,000              TOTAL LIAB. & EQUITY         $450,000

Jan. 2]     Sold 200,000 shares of common stock for $2,600,000.

Jan. 3]    Purchased on account $40,000 of inventory for resale to customers. Terms

              were 5/60 net 90.

Jan. 10] Paid $5,000 for promotion & marketing expenses. Promotion would run

   through the month of January 2018.

Jan. 15] Purchased a 3-year insurance policy for $3,600 in cash. Effective date is

   January 1, 2018 to December 31, 2020.

Jan. 27]   Paid in full for purchases acquired January 3, 2018.

Feb. 1]    Paid $3,000 as a mortgage payment. The balance on the mortgage is listed

    on the balance sheet dated December 31, 2017. Interest Rate is 8 per cent.

Feb. 10] Sales revenue generated was $400,000. $10,000 in cash received this date

    the balance on account. Terms 4/60 net 60 days.

Feb. 27]   Paid wages for the months of January and February 2018. Total wages

     that was paid for the two months was $40,000.

Mar. 1]   Acquired $200,000 of equipment. Useful life is 10 years. Signed a note

    (12%) for entire amount.

Mar. 1]    Declared a dividend of 50 cents per share.

Mar. 1]    Customer returned $25,000 of items acquired on February 10, 2018.

Mar. 1]    Signed a lease for warehouse space rental period is from April 1, 2018 to

                 December 31, 2018. A $10,000 deposit was paid on March 1.

Mar. 1]    Borrowed $80,000, and signed a note for this amount at 10%.

Mar. 3]    Paid the February Mortgage payment only this time $7,000 was paid.

Mar. 6]   Sales on account to customers amounted to $200,000. Terms are 10/60 net

     90 days.

Mar. 15]   Received full amount due from the February 10 sale.

Mar. 15]   Customer returned items that were sold for $35,000 on March 6, 2018.

Mar. 17]   Purchased $40,000 of inventory and terms were 8/30 net 90. This was a

      cash purchase.

Mar. 30]   Supplies were now determined to be $500.

Mar. 31]   Customer paid in full for the March 6 sale.

Mar. 31]   Spring Training paid $20,000 in wages for the month of March.

Mar. 31]   Paid $30,000 on the equipment note entered on March 1, 2018.

OTHER INFORMATION

1. Tax rate is 20%.

2. All equipment has a useful life of ten years.

4. Building has useful life of 20 years.

5. Ending Inventory for Spring Training Inc. is $20,000.

Rquirement:

PREPARE A SET OF FINANCIAL STATEMENTS FOR THE QUARTER ENDING MARCH 31, 2018

Please prepare for T accounts, Journal Entry, Income statement, Balance sheet and statement of Retained Earnings

Answer 1