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9. Assume cash unless otherwise noted. AG received $400,000 cash from an investor for 100% (80,000 shares of 1.00 par) stock in year 1 (1/1/13). Assuming still in its first year of operations in 2013 that AG sold 20,000 units of inventory for S500,000, of which S200,000 was on credit. Assuming that AG purchased $300,000 of inventory on credit throughout the year. Assuming that AG uses the percent of sales allowance method and estimates uncollectible receivables a 5 During the year AG also sold and delivered S300,000 of services; in cash On 12/1 AG purchased equipment, and and a building. AG purchased 3 large pieces of equipment for $50,000 each on credit; and from the purchase of equipment they were forced to pay in total $5,000 in sales tax in December. They also paid S500 in freight charges and installation charges for the equipment. AG purchased and paid for land $50,000. They then paid S5,000 for the land to be cleared. They paid S5,000 to pour the foundation. Lastly, they purchased a building for $200,000 on credit. On December 28, they invested S into investments with a 30- day maturity The inventory purchases were on credit (in order of purchases) 10,000 units at S10/unit, 5,000 units at S20/unit, and 20,000 units at S5/unit. AG uses FIFO method for inventory. AG incorporates the Lower of Cost or Market in determining ending inventory. Assume that the market value of the inventory suggested a value of S80,000 In the beginning of the year 1, on January 2 issued bonds with a face of 100,000, stated rate of9%, term 4 years and received $92,000. Market Rate is 10%. Interest is paid yearly on January 1. Assume straight line amortization of discount. AG had general selling expenses of $10,000. Depreciation of S20,000 for building and S10,000 for equipment. AG declared a $20,000 dividend on 12/15/13 lyear 1), but this will not be paid until the following year. Tax rate is 30% (round all amounts to the nearest dollar) Prepare an Income Statement,Balance Sheet based on the above information) as of 3. Prepare closing entries
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