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Preparing Financial Statements

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A list of accounts for Lloyd Inc. at December 31, 2010, follows:

Accounts Receivable $56,359
Advertising Expense 12,900
Capital Stock 50,000
Cash 22,340
Dividends 6,000
Income Tax Expense 1,450
Income Tax Payable 1,450
Inventory: January 1, 2010 6,400
Inventory: December 31, 2010 5,900
Purchase Discounts 1,237
Purchases 62,845
Retained Earnings, January 1, 2010 28,252
Salaries Payable 650
Sales 112,768
Sales Returns 1,008
Transportation-in 375
Utilities Expense 1,800
Wages and Salaries Expense 23,000
Wages Payable 120

Required

1. Determine cost of goods sold for 2010.

Cost of Goods Sold for 2010:
T F
T F
T F
T F
T F
T F
T F
T F
Cost of goods sold F

2. Determine net income for 2010.

Net Income for 2010:
Sales F
Less: sales returns F
T F
Cost of goods sold (from Part 1) F
T F
Operating expenses:
T F
T F
T F
Total operating expenses F
Income before tax F
T F
Net income F

3. Prepare a balance sheet dated December 31, 2010.

LLOYD INC.
BALANCE SHEET
AT DECEMBER 31, 2010

Assets
T F
T F
T F
Total assets F

Liabilities
T F
T F
T F
Total liabilities F
Stockholders' Equity
T F
T F
Total stockholders' equity F
Total liabilities and stockholders' equity F

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Solution Summary

The following posting helps prepare financial statements.

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