Preparation of Financial Statements
Barker Company has the following ledger accounts and adjusted balances as of December 31, 2016. All accounts have normal balances.
Barker's income tax rate is 40%. Barker has 300,000 shares of Common Stock authorized. You will need to determine the number of shares issued and the number of shares outstanding for your balance sheet.
Accounts Payable.................................. 24,000
Accounts Receivable.............................. 180,000
Accumulated Depreciation-Building............ 50,000
Administrative Expenses......................... 40,000
Allowance for Doubtful Accounts............... 22,000
Bonds Payable (Mature 2020)................... 300,000
Building............................................. 400,000
Cash................................................. 26,000
Common Stock.................................... 325,000
Cost of Goods Sold............................... 380,000
Discount on Bonds Payable...................... 50,000
Dividends.......................................... 20,000
Income from Operations of Division X........ 40,000
(Division X is a component of Barker Company)
Interest Revenue................................... 10,000
Inventory............................................ 280,000
Land................................................. 2 00,000
Loss from Fire....................................... 70,000
Loss from Sale of Division X........................... 80,000
(Division X is a component of Barker Company)
Paid-In Capital in Excess of Par.................. 75,000
Patent................................................ 30,000
Prepaid Rent........................................ 10,000*
Retained Earnings, January 1, 2016.............250,000
Sales Revenue......................................900,000
Selling Expenses.................................. 130,000
*Two years rent paid in advance for offsite document storage.
Instructions:
Use this information to prepare a multiple-step income statement and a classified balance sheet.