1 answer

Answer 1,2,3,4,5,6 Problem 3 (44 points) The following is Sunlight Co. year-end adjusted trial balance dated...

Question:

Problem 3 (44 points) The following is Sunlight Co. year-end adjusted trial balance dated December 31, 2018 Sunlight Co. Adju

7,500 1.800 Salaries Expense Utilities Expense Rent Expense Depreciation Expense Income Taxes Expense 1.950 650 600 $45.540 $ answer 1,2,3,4,5,6
Problem 3 (44 points) The following is Sunlight Co. year-end adjusted trial balance dated December 31, 2018. Sunlight Co. Adj
Problem 3 (44 points) The following is Sunlight Co. year-end adjusted trial balance dated December 31, 2018 Sunlight Co. Adjusted Trial Balance at 31 December 2018 Debit Credit $ 5,700 Cash Accounts Receivable 3,800 2,250 Prepaid Insurance Office Equipment 20.130 $ 600 Accumulated Depreciation: Office Equipment Accounts Payable 3,600 16,890 Capital Stock 2,700 Retained Earnings 1,100 Dividends 21,750 Revenue
7,500 1.800 Salaries Expense Utilities Expense Rent Expense Depreciation Expense Income Taxes Expense 1.950 650 600 $45.540 $45.540 Instructions: Using Adjusted Trial Balance above: (1) Prepare the necessary year-end closing entries. Date Account Tities and Explanation Credit (2) Prepare an Income Statement for the year ended December 31, 2018 (3) Prepare a Statement of Retained Earnings for the year ended December 31, 2018 (4) Prepare a Balance Sheet dated December 31, 2018 (5) Does the company appear to be liquid? Explain. (6) Has the company been profitable in the past? Explain. www.euruni.edu
Problem 3 (44 points) The following is Sunlight Co. year-end adjusted trial balance dated December 31, 2018. Sunlight Co. Adjusted Trial Balance at 31 December 2018 Debit Credit Cash $ 5,700 Accounts Receivable Receivable 3,800 Prepaid Insurance 2,250 Office Equipment 20,130 Accumulated Depreciation: Office Equipment $ 600 Accounts Payable 3,600 Capital Stock 16,890 Retained Earnings 2,700 Dividends 1,100 Revenue 21,750

Answers

QUESTION NUMBER 1

DATE

ACCOUNT TITLE AND EXPLANATION

DEBIT($)

CREDIT($)

Revenue a/c                  Dr

       To profit and loss a/c

(Revenue transferred)

21750

21750

Profit and loss a/c       Dr

        To salaries expense

        To utilities expenses

        To rent expenses

        To depreciation

        To income tax expenses

(All expenses are transferred)

12560

7500

1800

1950

650

660

QUESTION NUMBER 2

INCOME STATEMENT OF SUNLIGHT COMPANY FOR THE YEAR ENDED DECEMBER 31,2018

I)INCOME

$

    1.Revenue from operations

21750

    2.Other revenue

nil

TOTAL

21750

II)EXPENSES

    1.Salaries expenses

7500

    2.Utilities expenses

1800

    3.Rent expenses

1950

    4.Depreciation

650

    5.Income tax expenses

660

TOTAL

12560

III) PROFIT (I-II)

9190

QUESTION NUMBER 3

STATEMENT OF RETAINED EARNINGS FOR THE YEAR ENDED DECEMBER 31,2018

$

Retained earnings

2700

Add: net profit

9190

11890

Less: dividend

(1100)

10790

QUESTION NUMBER 4

BALANCESHEET DATED DECEMBER 31,2018

$

  1. EQUITY AND LIABILITIES
  1. Shareholder’s fund
  1. Share capital

16890

  1. Retained earnings

10790

  1. Non-current liabilities

nil

  1. Current liabilities (account payable)

3600

                                                                                        TOTAL

31280

  1. ASSET
  1. Non-current Asset
  1. Fixed Tangible Asset (note 1)

19530

  1. Current asset
  1. Trade Receivables

3800

  1. Prepaid insurance

2250

  1. cash

5700

                                                                                              TOTAL

31280

NOTE.1 OFFICE EQUIPMENT

$

Office equipment

20130

Less: Accumulated depreciation

(600)

19530

QUESTION NUMBER 5

Yes, the company appear to be liquid.

Liquidity ratio of company = liquid asset: current liability

Liquid Asset = cash+ account receivables

                       =5700+3800

                       =9500

Current liabilities = 3600

Liquid ratio = 9500/3600

                         = 2.64:1

QUESTION NUMBER 6

Company is in profitable position.

Return on capital will be 54.41%( profit/capital)

.

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