Problem:
Prepare a multiple step income statement, statement of retained earnings, and classified balance sheet with common-size financial information (balance sheet and income statement) based on the attached adjusted trial balance.
Smith, Inc.
Adjusted Trial Balance
December 31, 2011
| |
|
Debit |
Credit |
| Accounts receivable |
|
304,000 |
|
| Accumulated depreciation - buildings |
|
|
175,000 |
| Accumulated depreciation - vehicles |
|
|
44,000 |
| Allowance for bad debts |
|
|
1,000 |
| Buildings |
|
406,000 |
|
| Copyrights |
|
130,000 |
|
| Inventory |
|
69,000 |
|
| Land |
|
98,000 |
|
| Land held for speculation |
|
170,000 |
|
| Last National Bank Checking |
|
51,000 |
|
| Prepaid insurance |
|
12,800 |
|
| Supplies |
|
8,000 |
|
| Vehicles |
|
153,000 |
|
| Accounts payable |
|
|
73,000 |
| Bonds payable |
|
|
400,000 |
| Interest payable |
|
|
59,000 |
| Discount on bonds payable |
|
83,800 |
|
| Notes payable (due in 3 years) |
|
|
113,000 |
| Unearned rent |
|
|
13,000 |
| Additional paid in capital, common stock |
|
|
72,000 |
| Common stock ($10 par) |
|
|
160,000 |
| Dividends paid |
|
85,000 |
|
| Retained earnings, Janaury 1 |
|
|
164,000 |
| Treasury stock |
|
35,000 |
|
| Rent revenue |
|
|
84,000 |
| Sales |
|
|
1,711,600 |
| Sales discounts |
|
103,000 |
|
| Advertising expense |
|
73,000 |
|
| Commissions paid |
|
123,000 |
|
| Cost of goods sold expense |
|
472,000 |
|
| Depreciation expense |
|
72,000 |
|
| Insurance expense |
|
9,000 |
|
| Interest expense |
|
11,000 |
|
| Loss on sale of equipment |
|
41,000 |
|
| Salaries expense |
|
492,000 |
|
| Sales entertainment expense |
|
46,800 |
|
| Supplies used |
|
21,200 |
|
| Totals |
|
3,069,600 |
3,069,600 |
Income taxes are 30% and have not been recorded or paid. On January 1, there were 10,000 shares of common stock outstanding. There were no stock transactions during the year.
Check figures: income from operations $299,600 net income $232,120; total assets $1,181,800; taxes payable $99,480.