Tower Company: worksheet, profit and loss statement, balance sheet and cash flow.
Transactions are shown in attached file.
Prepare worksheets and the three main financial statements in good form for the newly formed Tower Company. Tower Company started business on 1 July 2002 with a fiscal year end of 30 June 2003. It uses FIFO-periodic inventory system and straight-line depreciation.
It uses accrual accounting and follows Australian GAAP. Assume that tax payable/expense is 'Net Income Before Tax' multiplied by a flat 30% tax rate (there is no deferred tax issues). Assume that the Cash component of COGS is $2,000,000 as detailed below. Ignore bad debts and interest income. (Ref to attachment)
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Solution Summary
The solution presents the worksheet and the three financial statements in good form for Tower Company for the fiscal year end June 30, 2003.