Draw up a comparative balance sheet and determine the profit for the year.
4. Make an analytical statement showing the effect on the various assets and liabilities of the profits made during the year.
5. Discuss these changes and so far as possible show how they were brought about.
V
1. On December 31, 19—, James Good’s books revealed the following facts:
- Cash $25,000.
- Due from customers $130,000.
- Plant and equipment $100,000.
- Other assets $15,000.
- Due creditors for merchandise $55,000.
- Accrued expenses $7,980.
- Mortgage on plant $50,000.
- Other liabilities $49,500.
- Merchandise now on hand $67,800.
- Capital at beginning of year $150,000.
- Drawings during the year $10,000.
- Sales $300,000.
- Initial inventory $75,000.
- Purchases $200,000.
- Selling expenses $30,000.
- General administrative expenses $27,480.
Draw up a balance sheet with the net worth section expanded to show the operations for the year.
2. On January 2, 19—, the value of the goods on A. R. Knight’s shelves amounted to $85,980, and he bought $275,600 worth during the year. On December 31 of the same year the inventory was $106,720. What was the amount of gross sales, if gross profits were $96,000 and returned sales $17,500?
3. Expenses for conducting Knight’s business for the year were as follows:
- Salesmen’s salaries $18,750.
- Advertising $2,750.
- Expenses of shipments $4,580.
- Office help $12,800.
- Rent $18,000.
- Insurance $2,500.
- Supplies $5,400.
- Depreciation on buildings $6,500.
- Interest $5,250.
- Taxes $3,920.