Melody Lane Music Company was started by John Ross early in 2021. Initial capital was acquired by issuing shares of comm

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Melody Lane Music Company Was Started By John Ross Early In 2021 Initial Capital Was Acquired By Issuing Shares Of Comm 1 (22.74 KiB) Viewed 12 times

Melody Lane Music Company Was Started By John Ross Early In 2021 Initial Capital Was Acquired By Issuing Shares Of Comm 2 (26.42 KiB) Viewed 12 times

Melody Lane Music Company was started by John Ross early in 2021. Initial capital was acquired by issuing shares of common stock to various investors and by obtaining a bank loan. The company operates a retail store that sells records, tapes, and compact discs Business was so good during the first year of operations that John is considering opening a second store on the other side of town The funds necessary for expansion will come from a new bank loan. In order to approve the loan, the bank requires financial statements. John asks for your help in preparing the balance sheet and presents you with the following information for the year ending December 31, 2021: BOOK a. Cash receipts consisted of the following: rences From customers $454,600 From issue of common stock 165,000 100,000 From hank loan b. Cash disbursements were as follows: Purchase of inventory $313,000 45,000 43,000 Rent Salaries 18,000 utilities Insurance 16,000 38,000 Purchase of equipment c. The bank loan was made on March 31, 2021 A note was signed requiring payment of interest and principal on March 31, 2022. The Check my work
c. The bank loan was made on March 31, 2021. A note was signed requiring payment of interest and principal on March 31, 2022. The interest rate is 12%. d. The equipment was purchased on January 3, 2021, and has an estimated useful life of 5 years with no anticipated salvage value. Depreciation per year is $7,600. e. Inventory on hand at the end of the year cost $113,000. f. Amounts owed at December 31, 2021, were as follows: To suppliers of inventory To the utility company $33,000 3,000 g. Rent on the store building is $3,000 per month. On December 1, 2021, four months' rent was paid in advance. h. Net income for the year was $89,000, Assume that the company is not subject to federal, state, or local income tax 1. Three hundred thousand shares of no par common stock are authorized, of which 33,000 shares were issued and are outstanding. Required: Prepare a balance sheet at December 31, 2021. Include headings for each classification, as well as titles for each classification's subtotal. (Amounts to be deducted should be indicated by a minus sign.) MELODY LANE MUSIC COMPANY Balance Sheet At December 31, 2021 Assets < Prev 11 of 11 Next >