May Star Merchandising

Trial Balance
December 31, 2018
Account Title Code Amount
Accounts Payable L 585,450
Accounts Receivable A 537,500
Accumulated Depreciation - Store Furniture & Equipment CA 291,250
Accumulated Depreciation-Office Equipment CA 368,750
Advertising Expenses E 15,500
Allowance for Doubtful Accounts CA 26,875
May Star, Capital OE 1,478,875
May Star, Drawing OE 125,000
Cash A 183,750
Depreciation Expense - Store Furniture & Equipment E 157,500
Depreciation Expense - Office Equipment E 106,500
Doubtul Accounts Expense E 12,875
Freight in COS 41,250
Freight out E 72,075
Store Furniture and Fixtures A 1,165,000
Interest Expense E 67,100
Interest Income R 34,020
Merchandise Inventory, January 1, 2018 COS 500,000
Notes Payable L 176,400
Notes Payable, (due 2020) L 600,000
Notes Receivable A 283,500
Office Equipment A 1,475,000
Office Salaries Expense E 366,860
Office Supplies Expense E 64,545
Office Supplies A 22,500
Prepaid Rent A 27,500
Purchase Discounts COS 55,000
Purchase Returns and Allowances COS 137,500
Purchases COS 2,750,000
Rent Expense E 120,000
Sales R 4,805,000
Sales Discounts CR 96,100
Sales Returns and Allowances CR 144,150
Sales Salaries Expense E 172,900
Unearned Sales Revenue L 90,000
Utilities Expense E 176,085
Witholding Tax Payable L 34,070
Merchandise Inventory, December 31, 2018 A,COS 427,850

Additional Information:
Cash Receipts:
Cash sales CF 3,208,760
Collections of Accounts Receivable CF 1,488,990
Interest on notes receivable CF 34,020
Proceeds from sale of equipment CF 8,750
Proceeds from loan from BDO CF 600,000

Cash payments
Cash purchases of merchandise 1,600,585
Payment of accounts payable CF 1,471,750
Payment for operating expenses CF 1,096,315
Interest on notes payable CF 82,600
Owner's withdrawal CF 125,000
Cash purchase of equipment CF 975,000

Cash balance, January 1, 2018 194,480

May Star Merchandising

Income Statement
For the period ending December 31, 2018

Note
Net Sales 1
Cost of Sales 2
Gross Profit
Other Income 3
Total Income
Less: Operating Expenses
Distribution Costs 4
Administrative Expenses 5
Financing Cost 6
Net Income

May Star Merchandising

Statement of Changes in Owner's Equity
For the period ending December 31, 2018

May Star Capital, January 1, 2018 P

Net Income
Sub-Total
May Star, Drawing
May Star Capital, December 31, 2018 P

May Star Merchandising

Statement of Financial Position
December 31, 2018
Notes
Assets
Current Assewts
Cash P
Trade and Other receivables 7
Merchandise Inventory, December 31
Prepaid Expenses 8
Total Current Assets P
Non-Current Assets
Propery, Plant and Equipment 9
Total Assets P
Liabilities and Owner's Equity
Current Liabilities
Trade and other payables 10 P

Non-current Liability
Notes Payable (due in 2020)
Total Liabnilities P

Owner's Equtiy
May Star, Capital
Total Liabilities and Owner's Equity P

May Star Merchandising

Statement of Cash Flows
For the period ending December 31, 2018

Cash flows from operating activities

Cash sales P
Collections of accounts receivable
Interest income on savings deposit
Cash purchases of goods for sale
Payments of accounts payable
Payments for operating expenses
Interest on notes payable
Net cash provided from operating activities P

Cash flows from investing activities

Proceeds from sale old furniture and fixtures P
Cash purchase of equipment
Net cash used in investing activities P

Cash flows from financial activities

Proceeds from loan from BDO
Owner's withdrawal
Net Cash provided from financing activities
Net Cash inflows (outflows) P
Cash, January 1, 2018
Cash balance, December 31, 2018 P

NOTES TO FINANCIAL STATEMENTS

Note 1- Net Sales
Sales P
Less: Sales Discount P
Sales Returns and allowances -
P -

Note 2 - Cost of Sales

Merchandise inventory, January 1, 2018 P
Add: Net cost of Purchases
Purchases
Less: Purchase discount P
Purchase returns & allowances
Net Purchases P
Add: Freight in
P
Less: Merchandise inventory, December 31, 2018
Cost of Sales P

Note-3 Other Income

Interest Income P
P

Note-4 Distribution Costs

Sales Salaries P
Depreciation-Store Furniture and Equipment
Advertising
Freight out
P

Note-5 Administrative Expenses

Office Salaries Expense P
Depreciation Expense-Office Equipment
Utilities Expense
Rent Expense
Office Supplies Expense
Doubtul Accounts Expense
P

Note-6 Finance Costs

Interest Expense P