Problem:
Prepare an Income Statement using the multi-step format. Prepare a Balance Sheet using the Classified Balance Sheet format.
All accounts have normal balances, the year-end is Dec. 31, 2004
Correct Trial Blance Sheet:
| ACME |
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| Trial Balance |
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| 31-Dec-04 |
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| Account |
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Debits |
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Credits |
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| Cash |
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$ |
480,000.00 |
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| Marketable Securities |
$ |
200,000.00 |
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| Accounts Receivables |
$ |
406,000.00 |
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| Allowance for doubtful acct. |
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$ |
22,000.00 |
| Inventories |
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$ |
1,285,000.00 |
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| Prepaid Insurance |
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$ |
23,510.00 |
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| Other Current Assets |
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$ |
229,300.00 |
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| Land |
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$ |
500,000.00 |
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| Building |
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$ |
1,850,000.00 |
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| Machinery & Equipment |
$ |
978,000.00 |
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| Leasehold Improvements |
$ |
302,000.00 |
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| Accum Deprecitaion |
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$ |
445,000.00 |
| Goodwill |
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$ |
400,000.00 |
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| Accounts Payable |
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$ |
386,000.00 |
| Income Tax Payable |
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$ |
223,650.00 |
| Other Current Liabilities |
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$ |
349,500.00 |
| Salaries Payable |
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$ |
76,960.00 |
| Bonds Payable, Due 2028 |
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$ |
429,000.00 |
| Deferred Taxes |
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$ |
165,000.00 |
| Preferred Stock, $100 PAR |
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$ |
800,000.00 |
| Common Stock |
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$ |
607,500.00 |
| Retained Earnings |
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$ |
2,890,000.00 |
| Dividends Paid |
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$ |
380,000.00 |
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| Sales |
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$ |
9,830,000.00 |
| Interest Income |
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$ |
55,000.00 |
| Cost of Sales |
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$ |
6,316,000.00 |
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| Administrative Expense |
$ |
335,000.00 |
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| Administrative Wages |
$ |
523,000.00 |
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| Advertising Expense |
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$ |
165,000.00 |
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| Amortization |
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$ |
40,000.00 |
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| Depreciation Expense |
$ |
368,000.00 |
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| Payroll Tax Expense |
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$ |
247,000.00 |
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| Income Tax Expense |
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$ |
262,000.00 |
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| Research & Dev. Costs |
$ |
536,600.00 |
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| Selling Expense |
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$ |
453,200.00 |
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$ |
16,279,610.00 |
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$ |
16,279,610.00 |
The corporation has 680,000 shares issued and outstanding at Dec 31, 2004. On May 1, 2004 the corporation sold 65,250 shares of common stock to the public for $130,500. The new shares are included in the the 680,000 number above the proceeds are included in the Common Stock value of $607,500. The preferred stock had no activity during the year and has a 8% dividend rate. The Preferred dividend was paid during the year.