The partially completed 2010 balance sheet and income statement for Nassau Corp. follows:
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Nassau Corporation Balance Sheet December 31, 2010 |
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Assets |
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Current Assets |
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Cash |
$ 38,000 |
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Accounts Receivable |
(A1) |
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Less: Allowance for Doubtful Accounts |
(A2) |
(A3) |
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Inventory |
(B1) |
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Total Current Assets |
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(D1) |
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Property, Plant & Equipment |
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Land |
(C1) |
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Building |
(C2) |
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Less: Accumulated Depreciation |
$ 15,300 |
(C3) |
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Equipment |
$ 72,000 |
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Less: Accumulated Depreciation |
(D2) |
$ 36,000 |
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Total Property, Plant & Equipment |
(D3) |
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Total Assets |
$ 495,200 |
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Liabilities |
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Current Liabilities |
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Accounts Payable |
$ 37,300 |
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Interest Payable |
14,500 |
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Total Current Liabilities |
(D4) |
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Long Term Liabilities |
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Mortgage payable |
(D5) |
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Total Liabilities |
$ 271,800 |
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Stockholders’ Equity |
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Common Stock |
$ 30,000 |
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Retained Earnings |
(D6) |
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Total Stockholders’ Equity |
$(D7) |
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Total Liabilities and Stockholders’ Equity |
$(D8) |
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Nassau Corporation Income Statement For the year ended December 31, 2010 |
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Sales |
$ 358,000 |
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Cost of Goods Sold |
(B2) $180,000 |
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Gross Profit |
$ 178,000 |
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Operating Expenses |
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Selling Expenses |
$(D9) |
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Administrative Expenses |
74,000 |
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Total Operating Expenses |
$(D10) |
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Income before Income Taxes |
$ 75,000 |
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Income Tax Expense (20%) |
(D11) |
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Net Income |
$ (D12) |
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ALL COMPUTATIONS MUST BE CLEARLY SHOWN.
- Nassau Corporation’s accounts receivable balance is $40,000. Of this amount, $34,000 is current and $ 6,000 is past due. From experience, Nassau expects it will collect 95% of the current accounts and 70% of the past due accounts. Compute Nassau’s:
(A1) Accounts receivable
(A2) Allowance for Doubtful Accounts
(A3) Net realizable value of accounts receivable
- Nassau Corporation uses a periodic inventory system and the weighted average cost flow assumption to account for ending inventory and cost of goods sold. During the year, Nassau sold 45.000 units. The following information pertains to their inventory records.
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Quantity in units |
Cost per unit |
Total cost |
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Beginning inventory |
20,000 |
$ 2.50 |
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Purchase #1 |
25,000 |
4.00 |
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Purchase #2 |
15,000 |
6.00 |
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Available for sale |
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Units sold |
45,000 |
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Units in ending inventory |
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B1(Balance Sheet) Ending Inventory _______________________
B2 (Income Statement) Cost of Goods Sold _______________________
- (C1 C3)
Nassau purchases new land and a building this year for $340,000. Of this amount, the value of the land was $34,000 and the value of the building was $306,000 at the time of purchase. $15,300 depreciation was recorded on the building this year.
- (D1 D12)
Once the above amounts have been computed, determine:
D1. Total Current Assets
D2. Accumulated Depreciation Equipment
D3. Total Property, Plant & Equipment
D4. Total Current Liabilities
D5. Mortgage Payable
D6. Retained Earnings
D7. Total Stockholders’ Equity
D8. Total Liabilities & Stockholders’ Equity
D9. Selling Expenses
D10. Total Operating Expenses
D11. Income Tax Expense
D12. Net Income