accounting project

interacctii_incstmt_proj_2 interacctii_balsht_proj_1

Brooklyn College of the City University of New York

Accounting Department

Intermediate Financial Accounting II
Professor G. Vasquez

Spring 2012

Page 1 of 1

Income Statement Project

Information as of 12/31/2011 (pretax basis):
Sales $3,200,000
Cost of Goods Sold 1,650,000
Interest Revenue 10,000
Loss from Abandonment of Plant Assets 40,000
Selling Expenses 340,000
Administrative Expenses 280,000
Cumulative Effect on Prior Years of Change from FIFO
to Average Cost for Inventory Costing Purposes

50,000

Loss from Earthquake 40,000
Gain on Disposal of a Component Business 90,000

Additional Information:
1. Name of Firm: Kaitlin Industries
2. Headquarters: San Juan, Puerto Rico
3. Business: Sells dolls and action figures
4. Divisions: Two
5. Operating Year: Calendar Year
6. Tax Rate: 30%
7. Common Stock: 100,000 shares outstanding during year

Requirements:
(1) Prepare income statement (to be audited) and notes (if necessary).

Good luck! 

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Brooklyn College of the City University of New York

Accounting Department

Intermediate Financial Accounting II
Professor G. Vasquez

Spring 2012

Page 1 of 1

Balance Sheet Project

Account balances at 12/31/2010:
Debit Credit
Cash $50,000
Accounts Receivable, net 38,500
Inventories 65,300
Equipment, net 104,000
Patents 20,000
Notes and Accounts Payable $52,000
Long-term Liabilities 100,000
Stockholders’ Equity 125,800
$277,800 $277,800

Except for the following items, all adjustments have been recorded in the accounts.
1. Cash includes $200 petty cash and $20,000 in a fund designated for plant expansion in 2012.
2. The net accounts receivable is comprised of: (a) accounts receivable $52,000, and (b) allowance for doubtful

accounts $13,500.
3. Equipment had a cost of $132,000 and accumulated depreciation of $28,000.
4. Notes and Accounts Payable is comprised of the following: Accounts Payable $32,000; Taxes Payable $3,000;

Note Payable $17,000, due June 30, 2012.
5. Long-term liabilities are 10-year bonds paying interest at 9% maturing June 30, 2021.
6. Stockholders’ Equity is comprised of: Common Stock ($1 par) $50,000; Additional Paid-in Capital $55,000; and

Retained Earnings of $20,800.

Additional Information:
1. Name of Firm: FMB Inc.
2. Headquarters: Taos, New Mexico
3. Business: Manufactures computer chips
4. Operating Year: Calendar Year (2011)
5. Sales $210,000; EBIT $14,000; MV of Equity $225,000.

Requirements:
(1) Prepare classified balance sheet (to be audited) and notes (if necessary).

Good luck! 

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