GeneralProducts Inc.

Balance Sheet
For the year ended December 31, 2016
ASSETS
Current Assets
Cash and Cash Equivalent $ (349)
Accounts receivable $ 54,630
Inventory $ 225,935
Inventory of Premiums $ 1,420
Total Current Assets $ 281,636
Long Term Assets
Investments $ 66,775
Property, Plant and Equipment $ 780,000
Less Accumulated Depreciation $ (120,000) $ 660,000
Total Long term assets $ 726,775
Intangible Assets
Trade Marks $ 184,000
Total Assets $ 1,192,411
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ 13,143
Liability for Premiums and Coupons $ 1,150
5% Short Term Notes Payable 03/31/2016 $ -
Accrued Interest on 6% Bonds Payable $ -
Total Current Liabilities $ 14,293
Long Term Liabilities
6% Bonds Payable due 2020 $ -
5% Bonds Payable due 2026 $ 100,000
Unamortized Discount on Bonds Payable $ (7,436)
Long Term Liabilities $ 92,564
Total Liabilities $ 106,857
Shareholders' Equity
Common Stock
125,000 shares, par value $1 $ 130,000
Paid in Capital in Excess of Par $ 946,000
Retained Earnings $ 35,455
Net income (loss) $ (25,901)
Total Shareholders' Equity $ 1,085,554
Total Liabilities and Shareholders' Equity $ 1,192,411
 GeneralProducts Inc.
Income Statement
At December 31, 2016

Operating revenues
Sales Revenues $ 940,560
Less: Cost of Goods Sold $ (780,650)
Gross Margin $ 159,910
Operating expenses
Legal expenses $ 45,000
Interest on bonds payable $ 8,744
Amortization expenses on trade marks $ 6,000
Premiums expense $ 990
Selling Administrative expenses $ 87,345
PP&E Depreciation expesnse $ 30,000
Total Operating expenses $ 178,079
Nonoperating expenses
Loss on retirement of bonds $ 7,732
Total Nonoperating expenses $ 7,732
Net income (loss) $ (25,901)

GeneralProducts Inc.
Statement of Retained Earnings
For the year ended December 31, 2016

Common Stock $1 Additional Paid-in Retained Earnings

Par Capital

Retained earnings at Dec. 31, 2015 $ 130,000 $ 946,000 $ 35,455

Net loss for the year ended Dec. 31, 2016 $ (25,901)
Dividends paid to shareholders
Retained earnings at Dec. 31, 2016 $ 130,000 $ 946,000 $ 9,554
 GeneralProducts, Inc
Journal entries
At the end of December 31, 2016

DATE ACCOUNT TITLES AND EXPLANATION

Jan 1 1
Accrued Interest on 6% Bonds Payable
Cash
To record payment for Interest accrued from 2015

2
Mar 31 5% Short Term Notes Payable
Cash
To record payment for short term notes due on date

Jun 30 3
Interest on 6% Bonds Payable
Cash
To record payment for semiannual Interest on 6% bonds

Sep 1 4
Interest on 6% Bonds Payable
Loss on retirement of bonds
6% Bonds Payable
Unarmotized Discount on Bonds Payable
Cash
To record redemption of 6% Bonds before maturity

Sep 1 5
Cash
 Unamortized Discount on Bonds Payable
5% Bonds Payable
To record issuing of $100,000 in 5% Bonds at discount

Dec 31 6
Interest on 5% Bonds Payable
Cash
To record payment for semiannual Interest on 5% bonds

Dec 31 7
Legal expenses
Cash
To record litigation expenses on Trade Marks

Dec 31 8
Amortization expenses on trade marks
Trade Marks
To record amortization on Trade Mark

Dec 31 9
Accounts receivable
Sales revenues
To record sales revenues on account

Dec 31 10
Total Inventory of Premiums (@1.10 per premium)
Shareholders'
Equity Accounts payable
$ 1,111,455 Purchase of 1,000 premiums at $1.10 each
$ (25,901)
$ - Dec 31 11
$ 1,085,554 Premiums expense
Liability for Premiums and Coupons
To record premiums expected to redeem on year

Dec 31 12
Liability for Premiums and Coupons
Inventory of Premiums
 Purchase of 1,000 premiums at $1.10 each

Dec 31 13
Selling Administrative Expenses
Cash
To record Selling Administrative expenses during 2016

Dec 31 14
PP&E Depreciation Expenses
Accumulated PP&E Depreciation
To record Selling Administrative expenses during 2016

Dec 31 15
Cash
Accounts Receivable
To record cash collected from receivables

Dec 31 16
Purchases
Accounts Payable
To record purchases on account during the year

Dec 31 17
Accounts Payable
Cash
To record cash paid to suppliers

Dec 31 18
Property, Plant and Equipment
Cash
To record purchase of land

Dec 31 19
Cost of Goods Sold
Purchases
Inventory
To record recognition of the COGS for the year

Dec 31 20
Sales revenues
Net income (loss)
Cost of Goods Sold
 Legal expenses
Interest on 6% bonds payable
Loss on retirement of bonds
Amortization expenses on trade marks
Premiums expense
Selling Administrative Expenses
PP&E Depreciation Expenses
To record closing entry for nominal accounts
Products, Inc
nal entries
December 31, 2016

AND EXPLANATION Dr. Cr.

1
s Payable $ 3,000
$ 3,000
t accrued from 2015

2
$ 8,000
$ 8,000
erm notes due on date

3 Semiannual Interest payment:

$ 3,000 $100,000 x 6% x 6/12 = $3,000
$ 3,000
nnual Interest on 6% bonds

4
$ 3,244 Interest payment from June 30 to September 1:
$ 7,732
$ 100,000 $100,000 x 6% x 2/12 = $1,000
Bonds Payable $ 6,732
$ 104,244 The account Unarmotized Discount on Bonds Payable had in 2015 a
onds before maturity balance of $6,732 corresponding for 10 period or $673,2 each
At Sep 1, 3.33 periods had transcurred. Therefore, the Discount
Balance is $6,732 * 6.66 = $4,488. The difference is accounted as
part of the interests given to bonds holders.
Loss on retirement of bonds:
Redemption value - (face value - discount balance at Sep 1)
1,000 @ 101 - ($100,000 - $4,488)

5
$ 92,564 Discount on 5% Bonds Payable:
nds Payable $ 7,436 Principal PV = Face value * Present value factor for a single payment (3%
$ 100,000 Principal PV = $100,000 * 0.5737 = $55,370
in 5% Bonds at discount Interest PV = Interest value * Present value factor for an ordinary annui
Interest PV = ($100,000 * 2,5%) * 14.8775 =
Discount = Face value - Principal PV - Interest PV
6 Discount = $7,436
$ 2,500
$ 2,500
nnual Interest on 5% bonds

7
$ 45,000
$ 45,000
on Trade Marks

8 Trade Marks amortization:

de marks $ 6,000
$ 6,000 2015 $200,000 / 20 = $10,000
de Mark 2016 200,000 / 25 x 2 = $16,000
$6,000
9
$ 940,560
$ 940,560
ccount

10
0 per premium) $ 1,100
$ 1,100
at $1.10 each

11
$ 990
Coupons $ 990 Premiums expense
to redeem on year 6,000 coupons x 60% estimated redemption rate =
3,600 coupons / 4 coupons per premium = 900 premiums
12
upons $ 340
$ 340 Premiums redeemed
at $1.10 each 3,400 coupons redeemed (@ $0.10 each) = $340
Note: Those coupons were taken from the last year's inventory
13
es $ 87,345
$ 87,345
ve expenses during 2016

14
$ 30,000
iation $ 30,000
ve expenses during 2016

15
$ 906,450
$ 906,450
receivables

16
$ 689,525
$ 689,525
nt during the year

17
$ 728,254
$ 728,254
rs

18
nt $ 30,000
$ 30,000

19
$ 780,650
$ 689,525
$ 91,125
OGS for the year

20
$ 940,560
$ 25,901
$ 780,650
 $ 45,000
ble $ 8,744
s $ 7,732
rade marks $ 6,000
$ 990
nses $ 87,345
es $ 30,000
minal accounts
Bonds Payable had in 2015 a
0 period or $673,2 each
. Therefore, the Discount
difference is accounted as

unt balance at Sep 1)

ue factor for a single payment (3%, 20 periods)

alue factor for an ordinary annuity (3%, 20 periods)

$37,194

Already accounted
New calculation
To account this year

ption rate =
m = 900 premiums
the last year's inventory