Question 1: Tootsie Roll Industries is engaged in the manufacture and sale of candy. Major products includeTootsie Roll, Tootsie Roll Pops, Tootsie Pop Drops, Tootsie Flavor Rolls, Charms, and BlowPoplollipops. The following items are listed on Tootsie Roll's recent income statement andbalance sheet. Mark each item from the Balance Sheet as an Asset (A), Liability (L), orShareholder's Equity (SE) and each item from the Income Statement as Revenue (R), or Expense(E).
(1) Notes payable to banks
(2) General and administrative
(3) Accounts payable
(4) Dividends payable
(5) Retained earnings
(6) Cash and cash equivalents
(7) Accounts receivable
(8) Provision for income taxes
(9) Cost of goods sold
(10) Machinery and equipment
(11) Net sales
(12) Inventories
(13) Marketing, selling, and advertising
(14) Buildings
(15) Land
(16) Income taxes payable
(17) Distribution and warehousing costs
(18) Investments (in other companies)
Question 2: Clay Corporation was organized by five individuals on January 1, 2014. At the end of January2014, the following monthly financial data are available:
Total Revenues $299,000
Total expenses $184,000
Income tax expense (all unpaid as of Jan 31, 2014) $34,500
Cash balance, Jan 31, 2014 $70,150
Receivables from customers (all considered collectible) $34,500
Merchandise inventory (by inventory count at cost) $96,600
Payables to suppliers for merchandise purchase from them $26,450(Will be paid during February 2014)
Contributed Capital (2,600 shares) $59,800
No dividends were declared or paid during January 2014.
**Using the information above, prepare an Income Statement for January 2014 and a BalanceSheet as of January 31, 2014.