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Question: superior hardwood company distributes hardwood products to small furniture manufacturers...

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Superior Hardwood Company distributes hardwood products to small furniture manufacturers. The adjusted trial balance data given below is from the firm’s worksheet for the year ended December 31, 2019.

ACCOUNTS Debit Credit
Cash $ 23,700
Petty Cash Fund 400
Notes Receivable, due 2020 11,400
Accounts Receivable 92,000
Allowance for Doubtful Accounts $ 5,600
Merchandise Inventory 230,000
Warehouse Supplies 2,820
Office Supplies 1,380
Prepaid Insurance 9,000
Land 42,000
Building 174,000
Accumulated Depreciation—Building 51,600
Warehouse Equipment 35,000
Accumulated Depreciation—Warehouse Equipment 16,200
Delivery Equipment 49,000
Accumulated Depreciation—Delivery Equipment 18,800
Office Equipment 23,000
Accumulated Depreciation—Office Equipment 10,800
Notes Payable, due 2020 19,800
Accounts Payable 38,600
Interest Payable 540
Mortgage Payable 59,000
Loans Payable, Long-term 15,000
Charles Ronie, Capital (Jan. 1) 436,760
Charles Ronie, Drawing 126,600
Income Summary 240,000 230,000
Sales 1,677,000
Sales Returns and Allowances 17,800
Interest Income 1,540
Purchases 763,000
Freight In 13,400
Purchases Returns and Allowances 8,040
Purchases Discounts 10,760
Warehouse Wages Expense 195,600
Warehouse Supplies Expense 6,700
Depreciation Expense—Warehouse Equipment 5,400
Salaries Expense—Sales 265,200
Travel and Entertainment Expense 21,100
Delivery Wages Expense 59,930
Depreciation Expense—Delivery Equipment 9,400
Salaries Expense—Office 70,200
Office Supplies Expense 3,600
Insurance Expense 5,800
Utilities Expense 8,890
Telephone Expense 6,120
Payroll Taxes Expense 57,000
Property Taxes Expense 5,200
Uncollectible Accounts Expense 5,400
Depreciation Expense—Building 8,600
Depreciation Expense—Office Equipment 3,600
Interest Expense 7,800
Totals $ 2,600,040 $ 2,600,040


Required:

  1. Prepare a classified income statement for the year ended December 31, 2019. The expense accounts represent warehouse expenses, selling expenses, and general and administrative expenses.
  2. Prepare a statement of owner’s equity for the year ended December 31, 2019. No additional investments were made during the period.
  3. Prepare a classified balance sheet as of December 31, 2019. The mortgage payable extends for more than a year.


Analyze:
What is the current ratio for this business?

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