Reference no: EM132953765

Question - XYZ Company provided the following information for the preparation of financial statements for 2017:

Balances-January 1, 2017:

Cash 1,200,000

Accounts Receivable 360,000

Inventory 690,000

Prepaid Insurance 105,000

Land 1,500,000

Building 6,000,000

Accumulated Depreciation 2,100,000

Equipment 2,400,000

Accumulated Depreciation 720,000

Accounts Payable 510,000

Accrued Salaries Payable 60,000

Advances from customers 270,000

Share Capital 7,500,000

Retained Earnings 1,095,000

Cash Receipts for 2017

Advances from customers 210,000

Cash sales and collections on accounts receivable 8,880,000

Sale of equipment on December 31, 2017, costing 100,000 on which 60,000 of depreciation had been accumulated 135,000

Cash Disbursements for 2017

Insurance premium 240,000

Purchase of equipment on October 1 600,000

Cash purchases and payments on accounts payable 4,920,000

Salaries 1,170,000

Dividends paid 375,000

Other expenses 405,000

Dividends of 5% were declared on June 30 and on December 31, 2017.

All depreciable assets should be depreciated at 10% per year.

Doubtful accounts are estimated to be 5% of year-end accounts receivable. The accounts receivable totaled 600,000 on December 31, 2017.

Additional data on December 31, 2017.

Inventory 735,000

Prepaid Insurance 75,000

Advances from customers 150,000

Accrued salaries 90,000

Accounts payable 300,000

Required -

1. Prepare the Income statement for 2017.

2. Prepare the Statement of financial position as of December 31, 2017.

3. Prepare the Statement of changes in equity.

4. Prepare the Notes to Financial Statement.