Preparation of trial balance, Income statements and Balance sheet.
McMinn Retail, Inc.
McMinn Retail, Inc., is a retailer that has engaged you to assist in the preparation on its financial statements at December 31, 2007. Following are the correct adjusted account balances, in alphabetical order, as of that date. Each balance is the "normal\" balance for that account. (Hint: The"normal" balance is the same as the debit or credit side that increases the account.)
|
Accounts payable ...................................................................................................
|
$12,750
|
|
Accounts receivable .............................................................................................
|
2,600
|
|
Accumulated depreciation; office equipment ................................................
|
12,000
|
|
Additional paid-in capital (common stock) ......................................................
|
7,000
|
|
Bonds payable (due December 31, 2012) .........................................................
|
22,500
|
|
Cash .....................................................................................................................
|
15,200
|
|
Common stock (1,800 shares, $10 par value) ...................................................
|
18,000
|
|
Cost of goods sold ...................................................................................................
|
100,575
|
|
Deferred income taxes ..........................................................................................
|
5,750
|
|
Depreciation expense; office equipment ............................................................
|
2,750
|
|
Dividends declared ................................................................................................
|
5,000
|
|
Income tax expense ................................................................................................
|
8,190
|
|
Insurance expense ...................................................................................................
|
900
|
|
Land ......................................................................................................................
|
37,500
|
|
Merchandise inventory .......................................................................................
|
17,500
|
|
Notes payable (due December 31, 2008) ............................................................
|
2,500
|
|
Office equipment ...................................................................................................
|
41,000
|
|
Office supplies .........................................................................................................
|
900
|
|
Office supplies expense .......................................................................................
|
520
|
|
Preferred stock (250 shares, $20 par value) ......................................................
|
6,000
|
|
Premium on bonds payable ....................................................................................
|
1,750
|
|
Prepaid rent ..........................................................................................................
|
1,800
|
|
Rent expense ........................................................................................................
|
6,100
|
|
Retained earnings (January 2007) ........................................................................
|
21,050
|
|
Salaries expense .....................................................................................................
|
68,095
|
|
Sales ......................................................................................................................
|
226,000
|
|
Sales returns and allowances .................................................................................
|
2,500
|
|
Sales taxes payable ...............................................................................................
|
8,200
|
|
Treasury stock (200 common shares at cost) ......................................................
|
2,250
|
|
Utilities expense .....................................................................................................
|
4,120
|
Instructions
c. Prepare a statement of financial position (balance sheet) as of December 31, 2007, following these guidelines:
- Include separate asset and liability categories for those assets which are "current."
- Include and label amounts for total assets, total liabilities, total stockholders'equity, and total liabilities and stockholders'equity.
- Present deferred income taxes as a noncurrent liability.
- To the extent information is available that should be disclosed, include that information in your statement.