Comprehensive problem 1-6
Course Project FINANCIAL ACCOUNTING
As a recently hired accountant for a small business, SMC, Inc., you are provided with last year’s balance sheet,
income statement, and post-closing trial balance to familiarize yourself with the business.
SMC, Inc.
Balance Sheet
December 31, 2021
Assets
Cash ......................................................................................................... $34,500
Accounts receivable ............................................................. XXXXXXXXXX25,000
Inventory ............................................................................... XXXXXXXXXX10,000
Supplies ................................................................................ XXXXXXXXXX200
Total assets.............................................................................................. $69,700
Liabilities and Stockholders’ Equity
Liabilities:
Accounts payable ............................................................................. $12,000
Salaries payable ............................................................ XXXXXXXXXX1,000
Income taxes payable ..................................................... XXXXXXXXXX3,675
Total liabilities.......................................................................................... $16,675
Stockholders’ equity:
Capital stock (10,000 shares outstanding).................................... $25,000
Retained earnings .......................................................... XXXXXXXXXX28,025
Total stockholders’ equity ..................................................... XXXXXXXXXX53,025
Total liabilities and stockholders’ equity................................................ $69,700
SMC, Inc.
Income Statement
For the Year Ended December31,2021
Sales revenue .......................................................................................... $110,000
Rent revenue ........................................................................ XXXXXXXXXX1,000
Total revenues......................................................................................... $111,000
Less cost of goods sold........................................................... XXXXXXXXXX60,000
Gross profit ........................................................................................... $ 51,000
Less operating expenses:
Supplies expense ............................................................................. $ 400
Salaries expense ........................................................... XXXXXXXXXX22,000
Miscellaneous expense................................................ XXXXXXXXXX4, XXXXXXXXXX,500
Income beforetaxes.............................................................................