Saratoga Inc.

Statement of Financial Position

December 31, 2014

 

 

           Assets                                                            Liabilities

Cash                                   $259,000          Notes Payable 8%           $60,000

Inventory                               $6,000          Accounts Payable             $40,000

 

Prepaid Insurance                $3,000                     Total                                  $100,000

Supplies                                 $4,000          Common Stock $5 par  $140,000

Land                                       $6,000          Excess of par                     $60,000

Building       $480,000                                Retained earnings          $418,000

 Acc. Depr. ( $40,000)      $440,000                       Total                                  $618,000

 

Total Assets                        $718,000          Total Liabilities & Equity           $718,000

 

Prepare in good financial form, a set of financial statements for Saratoga Inc. for the quarter ending 3/31/2015. 

 

1.             Jan. 2 - Purchased equipment for $70,000 and signed a note for the entire cost. The interest rate on the note is 6%. This loan requires monthly payments of $2,000. Monthly payments include interest and principle. Useful life is 5 years. 

 

2.             Jan. 2 - Machine purchased on this date for $100,000. Useful life for this machine is 10 years. Saratoga elects to sign a note for the full amount of the purchase price. The note has a 10% rate of interest. Payment on the note will be yearly and the first payment is due January 2, 2016.

 

3.             Jan. 10 - Purchased $80,000 of inventory.  The company paid in full on this date. Add dollar amount of this purchase to the existing inventory account.

 

4.             Jan. 15 - Issued 20,000 shares of common stock of Saratoga Inc. for $12 per share. All cash received on this date. Remember par value is only $5.

 

5.             Jan. 20 - Purchased $50,000 of inventory on account. Add this amount to the inventory account.

 

6.             Jan. 27 - Sales to a customer amounted to $190,000. Received $18,000 in cash on this date. 

 

7.             Feb. 1 - $2,000 monthly note payment made in cash. This note was entered into January 1, 2015.

 

8.             Feb. 10 - Utilities expenses paid. The amount was $5,000.

 

9.             Feb. 15 - Salary and wage expense were paid in the amount of $26,000.

 

10.          Feb. 27 - The $2,000 monthly note payment was made. This note was entered into Jan. 1, 2015.

 

11.          Feb. 27 - Received payment in full for the sales generated on Jan. 27, 2015.

 

12.          Mar. 15 - Paid $9,000 for advertising.

 

13.          Mar. 18 - Dividends declared to shareholders as record owners on March 30, 2015 and to be paid on April 1, 2015. The amount of the dividend is $1 per share.

 

14.          Mar. 31 - Salary and wages paid in the amount of $5,000.

 

15.          Mar. 31 - Supply Inventory was $1,000. Adjust the original balance of supplies to reflect the new balance at this date.

 

16.          Ending Inventory at March 31, 2015 was $40,000.   Remember to us the new total for inventory as of this date. Then make the adjustment for the new ending balance of $40,000 in ending inventory. You do this by the following entry: debit cost of goods sold and credit inventory for the dollar amount you need to go from total inventory to the required ending balance. Cost of goods sold is an expense account thus goes on the income statement.

 

17.          Mar. 31 - A new insurance policy contract was signed but no premiums were paid this date. The original insurance contract had expired on this date.

 

18.          Sales to customer amounted to $35,000 and no discounts were given. Cash was received for the full price.

 

19.          Assume the tax rate is 15% for Saratoga Inc.

 

20.      Building has a useful life of 20 years. Unless stated equipment carries a 10 year useful life.

 

You need the following

 

Statement of Revenue & Expenses {Income statement}

Statement of Retained Earnings 

Statement of Financial Position AKA {Balance Sheet}

SuperTutor

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Status NEW Posted 20 Jun 2017 05:06 AM My Price 20.00

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