The last person who answered this made the t accounts look really confusing so I wasn't sure how to go about analyzing them.
The t-accounts on page 2 show account balances as of January 1, 2018 for Honeydukes Sweet Shop. Listed below is a summary of the company's transactions for 2018, as well as other information about account balances. 1. Retail sales for the year totaled $1,800. $1,200 was received in cash and $600 was on account. 2. Purchased $1,340 of inventory on account. 3. Made payments to suppliers (for inventory previously purchased on account) in the amount of $1,352. 4. Collected $604 on accounts receivable. 5. Made payments of $220 for miscellaneous expenses. 6. Paid wages to employees during the year totaling $155. The beginning balance in Wages Payable is the amount of wages employees earned in December 2017, which were paid in January 2018. 7. On April 1st Honeydukes obtained a loan for $150 from a local bank, payable at the end of two years with semi-annual interest payments at an annual rate of 8%. 8. Made a semi-annual interest payment of $6 to the bank on September 30, 2018 (see part 7). 9. Dividends of $60 were declared on December 15, 2018. The dividends will be paid to common stockholders on January 8, 2019. Other information as of December 31, 2018: • Inventories on hand at December 31, 2018 were $160. • Depreciation expense for the year was $24. • Wages of $19 were earned by employees during December 2018 but will be paid in January 2019. • The next semi-annual interest payment will be made on March 31, 2019. • You may ignore income taxes. Required: Prepare the 2018 Income Statement and Balance Sheet for Honeydukes Sweet Shop. Use the t- accounts provided to show the effect of each transaction and any adjusting entries. Beginning balances are provided. You should add accounts as needed. You may choose to write out journal entries, but they are not required. Use the space provided on page 3 for your income statement and balance sheet. See next page for Honeydukes Sweet Shop t-accounts (January 1, 2018 balances shown) Cash Accounts Receivable Inventory 1571 PP&E 250 53 14 Accumulated Depreciation Accounts Payable Wages Payable Common Stock 200 60 Retained Earnings 143