Holmes Inc.
Balance Sheet
June 30, 2015
ASSETS LIABILITIES
Cash $50,000 Accounts Payable $ 50,000
Accounts Rec. 10,000 Mortgage Payable 150,000
Inventory 40,000
Supplies 4,000 TOTAL LIABILITIES $200,000
Land 66,000
Buildings 200,000 STOCKHOLDER EQUITY
Acc. Depr. <60,000> 140,000
Equipment 180,000 Common Stock $3 Par $30,000
Acc. Depr <80,000> 100,000 Retained Earnings 180,000
TOTAL EQUITY $210,000
TOTAL ASSETS $410,000 TOTAL LIAB. & EQUITY $410,000
July 1 Sold 200,000 shares of common stock for $1,800,000.
July 3 Purchased on account $80,000 of inventory for resale to customers. Terms granted to Holmes Inc. were 10/60 net 90 days.
July 5 Purchased a 3-year insurance policy for $6,000 in cash. The effective date of this insurance contract is July 1, 2015.
July 7 Returned $20,000 of purchases acquired July 3.
July 10 Sales revenue generated was $400,000. $10,000 in cash received this date the balance on account. Terms 4/60 net 90 days.
July 29 Paid $20,000 in wages.
July 29 Paid $5,000 July monthly mortgage payment. The rate of interest is 9% per year.
Aug.1 Acquired $200,000 of equipment. Useful life is 10 years. Signed a note (9%) for the full amount of this acquisition.
Aug. 2 Customers returned $30,000 of items purchased by them on July 10.
Aug. 3 Sold 100,000 shares at $7 per share and all cash received this date.
Aug. 10 Holmes paid in full the account balance due from the July 3rd purchase.
Aug. 19 Borrowed $80,000, and signed a note for this amount at 12%. Loan payments are made yearly.
Aug. 21 Declared a dividend of $1.50 per share.
Aug. 10 Received full amount due from the July 10 sale.
Aug. 28 Made the August mortgage payment of $5,000.
Aug. 29 August wages paid $20,000.
Aug. 30 Paid in cash $3000 on the equipment note entered into on August 1.
Sept. 15 Acquired $60,000 of inventory for cash. Terms were 9/90 net 190 days.
Sept. 18 Supply inventory valued at $600.
Sept. 23 Sales to customers amounted to $135,000. Terms 6/30 net 90 days. This was a cash sale.
Sept. 29 Made the monthly mortgage payment of $5,000
Sept . 30 Sold the equipment listed on the 6/30/15 balance sheet. The sale price was $120,000 and cash was received this date for the entire amount.
Sept. 30 End of the quarter inventory was valued at $35,000.
Sept. 30 September wages of $20,000 were accrued.
OTHER INFORMATION
1. Tax rate is 20%.
2. Building has a 20 year useful life from date of purchase.
3. All equipment has a useful life of ten years.
PREPARE A SET OF FINANCIAL STATEMENTS {Income Statement & Statement of Retained Earnings & Balance Sheet} for the Quarter ending 9/30/15