E02-12

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Exercise 2–12 Requirement 1 BLUEBOY CHEESE CORPORATION Income Statement For the Year Ended December 31, 2016 Sales revenue ............................................... $800,000 Cost of goods sold ....................................... 480,000 Gross profit .................................................. 320,000 Operating expenses: Salaries ....................................................... $120,000 Rent ............................................................ 30,000 Depreciation .............................................. 60,000 Advertising ................................................ 5,000 Total operating expenses .............. 215,000 Operating income ......................................... 105,000 Other expense: Interest ....................................................... 4,000 Net income ................................................... $101,000
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Exercise 2–12 (continued) BLUEBOY CHEESE CORPORATION Balance Sheet At December 31, 2016 Assets Current assets: Cash .......................................................... $ 21,000 Accounts receivable .................................. 300,000 Inventory .................................................... 50,000 Prepaid rent ............................................... 10,000 Total current assets .............................. 381,000 Property and equipment: Office equipment ...................................... $600,000 Less: Accumulated depreciation ............... (250,000) 350,000 Total assets ........................................ $731,000 Liabilities and Shareholders' Equity Current liabilities: Accounts payable ......................................
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