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Costa Company_Financial statements

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Question;Module 1 - SLP;Costa Company;Costa Company;31-Dec-12;Trial Balance (accounts;in alphabetical order);Accounts;Working Trial Balance;Balance Sheet;Income Statement;Debit;Credit;Debit;Credit;Debit;Credit;Accounts payable;$14,500;$14,500;Accounts receivable;$18,000;$18,000;Cash;41,500;41,500;Common stock;10,000;10,000;Depreciation expense;18,250;18,250;Cost of goods sold;402,610;402,610;Equipment (net of;depreciation);325,000;325,000;Insurance;1,500;1,500;Inventory;80,500;80,500;Long-term debt;105,000;105,000;Marketing;5,600;5,600;Misc. expenses;4,500;4,500;Paid-in capital;90,000;90,000;Property taxes;6,500;6,500;Rent;22,000;22,000;Retained earnings;156,400;245,500;Revenues;619,400;619,400;Salaries;61,940;61,940;Utilities;7,400;7,400;Total;$995,300;$995,300;$465,000;$465,000;$530,300;$619,400;Net Income;$89,100;In the first Case you had the opportunity to review the;financial statements of two companies and make some comparisons. This course is;not about preparing financial statements, but some practice helps explain the;concepts and solidifying the understanding of basic concepts. As part of this;first SLP, you?ll have the opportunity to acquire some hands on experience by;creating a simple income statement and balance sheet. You will use the;information provided below for Costa Company for this application. Below find a;working trial balance for Costa Company. This format is often used during the;preparation phase of the financial statements since it provides a good;overview.;Required;Your task is to prepare an income statement and a balance sheet;in good format after adjusting for the two errors below.;? A physical count of inventory indicates $70,500 on hand.;? There?s a check for $5,000 from a customer that has not been;recorded in the working trial balance. The sale was never recorded in the first;place, so the transaction relating to this sale is missing.;In addition;1. Describe the effect of the errors on the income statement and;balance sheet.;2. Is this company profitable? How do you determine whether or not;this is the case.;3. Is the company in a solid financial position? (Comment on;balance sheet.)

 

Paper#37229 | Written in 18-Jul-2015

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