Sally's Struthers Co.

1 Accounts Payable 12,000 14 Prepaid Insurance 3,000

Cash 12,000 Cash 3,000
To record payment of accounts payable To record purchase of 2 year policy on Nov 1

2 Cash 30,000 15 Land 50,000

Accounts Receivable 30,000 Common Stock 50,000
To record collections of accounts receivable To record exchange of 5,000 shares of
Common Stock for a piece of land
3 Cash 120,000
Note Payable-Bank 120,000 16 Cash 20,000
To record new borrowing from bank Accounts Receivable 20,000
To record collection of accounts receivable
4 Inventory 60,000
Cash 24,000 17 Interest Expense 12,000
Accounts Payable 36,000 Note Payable-Bank 20,000
To record purchase of 10 @ $6,000 each Cash 32,000
To record payment #1 on Note Payable-Bank
5 Taxes Payable 10,000
Cash 10,000 18 Wages Payable 5,000
To record payment of 2002 taxes Wage Expense 37,000
Cash 40,000
6 Utilities Expense 4,000 Wages Payable 2,000
Cash 4,000 To record wages for year
To record payment for utilities
19 Rent Expense 24,000
7 Cash 20,000 Rent Payable 2,000
Common Stock 20,000 Cash 28,000
To record issuance of 2,000 shares of stock Prepaid Rent 2,000
To record rent for year
8 Cash 84,000
Accounts Receivable 36,000 20 Depreciation Expense 33,000
Sales 120,000 Accumulated Depreciation-Vehicles 18,000
To record sales of 6 @ $20,000 each Accumulated Depreciation-Equipment 15,000
To record 2003 depreciation expens
9 Cost of Goods Sold 30,000 (100,000 - 10,000)/5 = 18,000
Inventory 30,000 (300,000 - 0)/20 = 15,000
To record cost of sales (6 @ $5,000)
21 Insurance Expense 1,250
10 Inventory 28,000 Prepaid Insurance 1,250
Cash 11,200 To record insurance expense for year
Accounts Payable 16,800 (1,000 + (3,000*2/24))
To record purchase of 4 @ $7,000 each
21 Tax Expense 18,225
11 Retained Earnings 14,000 Taxes Payable 18,225
Cash 14,000 To record 2003 taxes
To record payment of dividend (7,000*$2.00)
22 Sales 230,000
12 Cash 77,000 Cost of Goods Sold 58,000
Accounts Receivable 33,000 Wage Expense 37,000
Sales 110,000 Rent Expense 24,000
To record sale of 5 @ $22,000 each Utilities Expense 4,000
Interest Expense 12,000
13 Cost of Goods Sold 28,000 Depreciation Expense 33,000
Inventory 28,000 Insurance Expense 1,250
To record cost of sales Tax Expense 18,225
(2 @ $5,000) + (3 @ $6,000) Retained Earnings 42,525
To close revenue & expense accounts
Sally's Struthers Co. 2003
Assets = Liabilities + Owners' Equity +
Cash Accounts Payable Common Stock
BB 20,000 12,000 1 1 12,000 12,000 BB 50,000 BB
2 30,000 24,000 4 36,000 4 20,000 7
3 120,000 10,000 5 16,800 10 50,000 15
7 20,000 4,000 6 52,800 120,000
8 84,000 11,200 10
12 77,000 14,000 11 Wages Payable
16 20,000 3,000 14 18 5,000 5,000 BB Retained Earnings
32,000 17 2,000 18 11 14,000 229,000 BB
40,000 18
28,000 19
371,000 178,200 Rent Payable
192,800 19 2,000 2,000 BB

Accounts Receivable
BB 30,000 30,000 2 Taxes Payable
8 36,000 20,000 16 5 10,000 10,000 BB
12 33,000 18,225 21
69,000 20,000
49,000 Note Payable-Bank
0 BB
Inventory 17 20,000 120,000 3
BB 40,000 30,000 9 100,000
4 60,000 28,000 13
10 28,000
128,000 58,000
70,000

Prepaid Insurance
BB 1,000 1,250 21
14 3,000
4,000 1,250
2,750

Prepaid Rent
BB 0
19 2,000
 Vehicles
BB 100,000

Accumulated Deprec-Vehicles
36,000 BB
18,000 20
54,000

Equipment
BB 300,000

Accumulated Deprec-Equipment
150,000 BB
15,000 20
165,000

Land
BB 0
15 50,000

Security Deposits
BB 3,000
+ ( Revenues - Expenses )
Sales Cost of Goods Sold
120,000 8 9 30,000
110,000 12 13 28,000
230,000 58,000

Wage Expense
18 37,000

Rent Expense
19 24,000

Utilities Expense
6 4,000

Interest Expense
17 12,000

Depreciation Expense
20 33,000

Insurance Expense
21 1,250

Tax Expense
21 18,225
Sally's Struthers Co. 2003
Assets = Liabilities + Owners' Equity + ( Revenues - Expenses )
Cash Accounts Payable Common Stock Sales Cost of Goods Sold
BB 20,000 12,000 1 1 12,000 12,000 BB 50,000 BB 120,000 8 9 30,000
2 30,000 24,000 4 36,000 4 20,000 7 110,000 12 13 28,000
3 120,000 10,000 5 16,800 10 50,000 15 230,000 58,000
7 20,000 4,000 6 52,800 120,000 22 230,000 58,000 22
8 84,000 11,200 10
12 77,000 14,000 11 Wages Payable Wage Expense
16 20,000 3,000 14 18 5,000 5,000 BB Retained Earnings 18 37,000
32,000 17 2,000 18 11 14,000 229,000 BB 37,000 22
40,000 18 42,525 22
28,000 19 14,000 271,525
371,000 178,200 Rent Payable 257,525 Rent Expense
192,800 19 2,000 2,000 BB 19 24,000
24,000 22
Accounts Receivable
BB 30,000 30,000 2 Taxes Payable
8 36,000 20,000 16 5 10,000 10,000 BB Utilities Expense
12 33,000 18,225 21 6 4,000
69,000 20,000 4,000 22
49,000 Note Payable-Bank
0 BB
Inventory 17 20,000 120,000 3 Interest Expense
BB 40,000 30,000 9 100,000 17 12,000
4 60,000 28,000 13 12,000 22
10 28,000
128,000 58,000
70,000 Depreciation Expense
2033,000
Prepaid Insurance 33,000 22
BB 1,000 1,250 21
14 3,000
4,000 1,250 Insurance Expense
2,750 21 1,250
1,250 22
Prepaid Rent
BB 0
19 2,000 Tax Expense
21 18,225
Vehicles 18,225 22
BB 100,000

Accumulated Deprec-Vehicles
36,000 BB
18,000 20
54,000

Equipment
BB 300,000

Accumulated Deprec-Equipment
150,000 BB
15,000 20
165,000

Land
BB 0
15 50,000

Security Deposits
BB 3,000
 Sally's Struthers Co.
Balance Sheet
December 31, 2003

Assets Liabilities
Current Assets Current Liabilities
Cash $ 192,800 Accounts Payable $ 52,800
Accounts Receivable 49,000 Wages Payable 2,000
Inventory 70,000 Taxes Payable 18,225
Prepaid Insurance 2,750 Current Portion of
Prepaid Rent 2,000 Long-Term Debt 20,000
Total Current Assets 316,550 Total Current Liabilities 93,025
Fixed Assets
Vehicles $ 100,000 Long-Term Debt
Equipment 300,000 Note Payable- Bank 80,000
Depreciable Assets 400,000 Total Liabilities 173,025
Less: Accumulated
Depreciation (219,000) Owners' Equity
Subtotal 181,000 Common Stock $ 120,000
Land 50,000 Retained Earnings 257,525
Net Fixed Assets 231,000 Total Owners' Equity 377,525
Other Assets
Security Deposits 3,000 Total Liabilities and
Total Assets $ 550,550 Owners' Equity $ 550,550

Sally's Struthers Co.

Income Statement
For the Year Ended December 31, 2003

Sales $ 230,000
Cost of Goods Sold 58,000
Gross Margin 172,000

Operating Expenses
Wage Expense $ 37,000
Rent Expense 24,000
Depreciation Expense 33,000
Utilities Expense 4,000
Insurance Expense 1,250
Total Operating Expenses 99,250
Operating Income 72,750

Other Revenues & <Expenses>

Interest Expense < 12,000 >
Income Before Taxes 60,750
Tax Expense 18,225
Net Income $ 42,525

Earnings Per Share $ 6.30

$42,525/(5,000*4/12)+(7,000*7/12)+(12,000*1/12)

Sally's Struthers Co.

Statement of Owners' Equity
For the Year Ended December 31, 2003

Common Retained
Stock Earnings Totals

Beginning Balance, 12/31/02 $ 50,000 $ 229,000 $ 279,000

Issuance of Stock 70,000 70,000
Net Earnings for the Year 42,525 42,525
Less: Dividends Declared (14,000) (14,000)
Ending Balance, 12/31/03 $ 120,000 $ 257,525 $ 377,525