2023 General Products Inc is incorporated in Nevada USA on Jan 1st 2013 | Assignments Online

2023 General Products Inc is incorporated in Nevada USA on Jan 1st 2013 | Assignments Online

Assignments Online 2023 Business Finance


General Products Inc. is incorporated in Nevada, USA on Jan 1st 2013 to take over a local retail chain. The objective of the company is to supply goods of everyday use to customers at the most competitive prices. General Products has established a chain of stores throughout USA. The retail operations of the company are so designed that customers can shop seamlessly in stores and online.

You may use the attached Balance Sheet of General Products as of Dec 2015 and the financial data for 2016.The same information is provided below.


Balance Sheet of General Products    Inc. on December 31, 2015




Current Assets


Cash and Cash Equivalent



Accounts Receivables 






Inventory of Premiums   (@0.10 per premium) 



Total Current Assets 








Property Plant and   Equipment 



Less Accumulated   Depreciation 




Total Long Term   Assets 





Trade Marks 



Total Assets 





Current Liabilities 


Accounts Payable 



Liability for Premiums and   Coupons 



5% Short Term Notes Payable   due on March 31, 2016 



Accrued Interest on 6%   Bonds Payable 



Total Current Liabilities 



6% Bonds Payable due   2020 



Unamortized Discount   on Bonds Payable 




Total Liabilities



Stockholder’s Equity


Common Stock


125,000 shares, par value   $1 authorized 100,000 shares issued and outstanding



Paid-in Capital in Excess   of Par



Retained Earnings



Total Stockholders’ Equity




Total Liabilities and   Stockholders’ Equity



General Products provides us financial and business related data for 2016 below.


1. Trades Marks were acquired for $200,000 in 2015.Estimated useful at the time of acquisition was 20 years
There was a litigation brought out by a competitor against the TradeMark. General Products could successfully defend this litigation at a cost of $ 45,000. New useful life of Trade Mark is estimated to be 25 years from the date of acquisition.

2. All sales are on credit and total $ 940,560. COGS are $780,650.

3. Included in the total sales of $940,560 are the sales of General Products brand 6000 soap powder boxes General Products includes one coupon in every soap powder box. Customers can redeem 4 coupons for one Kitchen utensil. Based on past experience 60% of the coupons are redeemed by customers. During 2016 3,400 coupons were redeemed. Purchase of premiums during 2016 total 1,000 premiums @ $1.10 each on credit.


4. 6% Bonds Payable are issued on Jan 1 2015 to yield 8% interest. Interest is paid semi-annually on Jan 1st and June 30th.
General Products can redeem these Bonds any time after June 30,2016 @ 101.


5. To take advantage of lower interest rates and to finance the redemption of 6% Bonds on Sept.1st 2016, General Products issued 5%Bonds in the face value of $100,000 to yield 6% The maturity period of these 5% Bonds is 10 years and interest is paid semi-annually on 1st Jan and 30th June. The proceeds from the issue of 5% Bonds are used to redeem 6% Bonds Payable @ 101 on Sept.1st 2016.


6. Selling Administrative Expenses excluding depreciation are $87,345. PP&E is depreciated on Straight Line Method over 25 years of life.


7. Cash collected from customers total $906,450


8. Cash paid to suppliers for credit purchases total $728,254


9. Purchases of inventory total $689,525. All purchases are on credit.


10. General Products purchased Land for $30,000 for construction of building


1. Record the necessary journal entries for 2016


2. Prepare Income Statement and Retained Earnings Statement for the year 2016


3. Prepare Balance Sheet on December 31,2016


4. Show full work of all the financial items reported in Income Statement and Balance Sheet. Please round your calculations closest to $. Ignore tax.

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