please answer attached doc, thanks

please answer attached doc, thanks

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10.00 points
Kazaam Company, a merchandiser, recently completed its calendar-year 2011 operations. For the year, (1) all sales are credit sales, (2) all
credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts
Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. The
company’s balance sheets and income statement follow.
KAZAAM COMPANY
Comparative Balance Sheets
December 31, 2011 and 2010
2011
2010
Assets
Cash
$
49,200
$
74,000
Accounts
receivable
65,810
55,000
Merchandise
inventory
276,000
251,000
Prepaid
expenses
1,500
1,900
Equipment
159,000
107,500
Accum.
depreciation—
Equipment
(35,750)
(46,000)
Total assets
$
515,760
$
443,400
Liabilities and
Equity
Accounts
payable
$
59,835
$
112,000
Short-term
notes payable
10,000
6,000
Long-term notes
payable
70,000
49,000
Common stock,
$5 par value
162,250
150,250

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Paid-in capital in
excess of par,
common stock
36,000
0
Retained
earnings
177,675
126,150
Total liabilities
and equity
$
515,760
$
443,400
KAZAAM COMPANY
Income Statement
For Year Ended December 31, 2011
Sales
$
582,500
Cost of
goods sold
289,000
Gross profit
293,500
Operating
expenses
Depreciat
ion expense
$
20,000
Other
expenses
133,600
153,600
Other gains
(losses)
Loss on
sale of
equipment
5,375
Income
before taxes
134,525
Income
taxes
25,500

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