Q No.

1
Saleem provided following Trial Balance on December 31, 2015.
TITLE OF ACCOUNTS Nature statement
Cash A BS
A/c receivable A BS
Office equipment A BS
Marketing expense E IS
Prepaid advertising A BS
Other expense E IS
Office supplies expense E IS
Interest expense E IS
Mds. Inventory-beginning E IS
Purchases E IS
Transportation-in E IS
Sales return CR IS
Salaries expense E IS
Sales revenue R IS
Purchases return CE IS
Purchases discount CE IS
Interest income R IS
A/c payable L BS
Capital - Saleem C BS
Short-term loan L BS
Bill payable L BS
Long-term loan L BS
  TOTAL
ADJUSTMENT DATA:
1.       Mds. inventory ending Rs.45,000 I+B
2.       Depreciation on equipment cost 2% I+B
3.       Tax rate is 20% applied I+B
Required:
Prepare Income Statement
Prepare Classified Balance Sheet
DEBIT CREDIT A
45,000 L
175,000 C
325,000 R Financial statement
12,500 E 1 income statement
8,500 2 balance sheet
6,000
3,500 income statement
16,000 sales
27,800 less cost of goods sold
275,000 gross profit
22,000 less operating exp
12,000 operating income
65,000 less interest exp
575,000 income before tax
1800 less tax
4500 income after tax
27,000 add other income
35,000 net income
222,300
55,000 balance sheet
22,700 A= L + owaner equity
50,000
 993,300 993,300 A bs
L bs
C bs
R IS
E Is
income statement
sales
less cost of goods sold
gross profit
less operating exp
operating income
less interest exp
income before tax
less tax
income after tax
add other income
net income

Saleem and company

income statement
for the year ended Dec 31 2015
Sales 575,000
less sales return 12,000
Net sales 563,000
Less cost of goods sold
Mds. Inventory-beginning 27,800
add Purchase 275,000
less Purchase return 1,800
Purchases discount 4,500 6,300
net purchase 268,700
add transportation 22,000
total cost of purchase 290,700
total cost of goods available for sales 318,500
less M.invnetory ending 45,000
cost of goods sold 273,500
gross profit 289,500
less operating exp
Marketing expense 12,500
Other expense 6,000
Office supplies expense 3,500
Salaries expense 65,000
Depreciation exp 6,500
Total operating exp 93,500
operating income or Earning before interest and tax
( EBIT) 196,000
less interest exp 16,000
earning before tax 180,000
less tax 36,000
income after tax 144,000
add interest income 27,000
net income for the year 171,000
 Saleem and company
Balance sheet
As on Dec 31 2015
Assets liabilities + owaner equity
Current assets Liabilities
Cash 45,000 tax payable 36,000
A/c receivable 175,000 A/c payable 35,000
Prepaid advertising 8,500 Short-term loan 55,000
Mds. Inventory 45,000 Bill payable 22,700
Total current assets 273,500 Long-term loan 50,000
Fixed assets Total liabilities
Office equipment 325,000 Owaner equity
less allowance for depreciation 6,500 Capital - Saleem 222,300
318,500 add net income 171,000
Total fixed assets 318,500 total owaner equity
592,000
er equity

198,700

393,300
592,000
Q No.1
Saleem provided following Trial Balance on December 31, 2015.
TITLE OF ACCOUNTS Dr Cr
Cash 110,350
Account receivable 54600
Note receivable 8000
Inventory-opening 40,500
Supplies 650
Prepaid insurance 1200
Furniture and Fixture 183,200
Accumulated depreciation-furniture 2400
Account payable 47,000
Note payable (long-term) 12,600
Capital-Frank 100,000
Sales revenue 338,000
Sales discount 1400
Sales return and allowance 2000
Interest revenue 600
Purchases 89,300
Purchases discount 3000
Purchases return and allowances 1200
Freight in 5200
Rent expense 8400
TOTAL 504,800 504,800
1.      Inventory on hand at the end of the year $ 42,000
2.      Depreciation on Furniture book value 2%
3.      Tax rate is 10% applied
Required:
·         Income Statement showing EBIT and EAT
·         Balance Sheet
180,800
3616
income statement
sales
less cost of goods sold
gross profit
less operating exp
operating income
less interest exp
income before tax
less tax
income after tax
add other income
net income

Saleem and company

income statement
for the year ended Dec 31 2015
Sales 338,000
less sales return 2,000
sales discount 1,400 3,400
Net sales 334,600
Less cost of goods sold

Mds. Inventory-beginning 40,500

add Purchase 89,300
less Purchase return 1,200
Purchases discount 3,000 4,200
net purchase 85,100
Freight in 5,200
total cost of purchase 90,300
total cost of goods available for sales 130,800
less M.invnetory ending 42,000
cost of goods sold 88,800
gross profit 245,800
less operating exp
Rent exp 8,400
Depreciation exp 3,616
Total operating exp 12,016
operating income or Earning before interest and tax
( EBIT) 233,784
less tax 23,378
income after tax 210,406
add interest income 600
net income for the year 211,006
 Saleem and company
Balance sheet
As on Dec 31 2015
Assets liabilities + owaner equity
Current assets Liabilities
Cash 110,350 tax payable 23,378
A/c receivable 54,600 A/c payable 47,000
Note receivable 8,000 Note payable (long-term) 12,600
Supplies 650 Total liabilities
Perpaid insurance 1,200 Owaner equity
Mds. Inventory 42,000 Capital - Saleem 100,000
Total current assets 216,800 add net income 211,006
Fixed assets total owaner equity
office furniture 183,200
less allowance for depreciation 6,016
177,184
Total fixed assets 177,184
393,984
er equity

82,978

311,006

393,984
Q No.1
Saleem provided following Trial Balance on December 31, 2015.
TITLE OF ACCOUNTS DEBIT CREDIT
Cash 145,000
A/c receivable 75,000
Plant 325,000
Selling expenses 12,500
Prepaid Rent 8,500
Other expenses 6,000
Office supplies expense 3,500
Interest expense 16,000
Mds. Inventory-Beg 27,800
Purchases 275,000
Transportation-in 22,000
Sales return 12,000
Equipment 500,000
Acc. dep-equipment 75,000
Acc. dep- plant 100,000
All for bad debts 12,000
Salaries expenses 65,000
Marketable securities 45,000
Sales revenue 695,000
Purchases return 1,800
Purchases discount 4,500
Commission income 27,000
A/c payable 35,000
Capital 222,300
Short term loan 55,000
Long term loan 160,000
Bill payable 22,700
Retained earning 128,000
 TOTAL 1,538,300 1,538,300

ADJUSTMENT DATA:

1.      Depreciation charged 5% on equipment and 2% on plant book value.

2.      Inventory on hand at the end of the year Rs.12,000.

 3.      Tax rate 10%

Required: Income Statement and Balance Sheet

book value
225,000 2% 4500

425,000 5% 21250
 Saleem and company
income statement
for the year ended Dec 31 2015
Sales 695,000
less sales return 12,000
Net sales 683,000
Less cost of goods sold

Mds. Inventory-beginning 27,800

add Purchase 275,000
less Purchase return 1,800
Purchases discount 4,500 6,300
net purchase 268,700
Transportation-in 22,000

total cost of purchase 290,700

total cost of goods available for sales 318,500
less M.invnetory ending 12,000
cost of goods sold 306,500
gross profit 376,500
less operating exp
Selling expenses 12,500
Other expenses 6,000
Office supplies expense 3,500
Salaries expenses 65,000
depreciation exp on plant 4,500
Depreciation exp equipment 21,250
Total operating exp 112,750
operating income or Earning before interest and tax
( EBIT) 263,750
less interest exp 16,000
earning before tax 247,750
less tax 24,775
income after tax 222,975
add commission income 27,000
net income for the year 249,975