Question: Single-Step Income Retained Earnings, Periodic Inventory
Presented below is the trial balance of Thompson Corporation at December 31, 2012.
Thompson Corporation Trial Balance December 31, 2012
Debits Credits
Purchase Discounts $10,000
Cash $ 189,700
Accounts Receivable 105,000
Rent Revenue 18,000
Retained Earnings 160,000
Salaries and Wages Payable 18,000
Sales Revenue 1,100,000
Notes Receivable 110,000
Accounts Payable 49,000
Accumulated Depreciation- Equipment 28,000
Sales Discounts 14,500
Sales Returns and Allowance 17,500
Notes Payable 70,000
Selling Expenses 232,000
Administrative Expenses 99,000
Common Stock 300,000
Income Tax Expense 53,900
Cash Dividends 45,000
Allowance for Doubtful Accounts 5,000
Supplies 14,000
Freight -in 20,000
Land 70,000
Equipment 140,000
Bonds Payable 100,000
Gains on Sale of Land 30,000
Accumulated Depreciation- Building 19,600
Inventory 89,000
Buildings 98,000
Purchases 610,000
Totals $ 1,907,600 $ 1,907,600
A physical count of inventory on December 31 resulted in an inventory amount of $64,000; thus, cost of goods sold for 2012 is $645,000.
Instructions: Prepare a single-step income statement and a retained earnings statement. Assume that the only changes in retained earnings during the current year were from net income and dividends. Thirty thousand shares of common stock were outstanding the entire year.