Question

The trial balance of Skysong Wholesale Company contained the following accounts shown at December 31, the end of the company’s fiscal year.

SKYSONG WHOLESALE COMPANY Trial Balance December 31,2022
		Debit		Credit
Cash		$ 31,100
Accounts Receivable		38,900
Inventory		71,800
Land		91,300
Buildings		199,300
Accumulated Depreciation—Buildings				$ 59,300
Equipment		82,800
Accumulated Depreciation—Equipment				39,800
Notes Payable				54,000
Accounts Payable				16,800
Common Stock				159,300
Retained Earnings				66,500
Dividends		9,300
Sales Revenue				921,400
Sales Discounts		5,300
Cost of Goods Sold		709,200
Salaries and Wages Expense		50,600
Utilities Expense		10,700
Maintenance and Repairs Expense		8,200
Advertising Expense		4,500
Insurance Expense		4,100
		$1,317,100		$1,317,100

Adjustment data:

1.		Depreciation is $7,300 on buildings and $6,300 on equipment. (Both are operating expenses.)
2.		Interest of $3,800 is due and unpaid on notes payable at December 31.
3.		Income tax due and unpaid at December 31 is $23,300.

Prepare a multiple-step income statement for the year ended December 31, 2022.

Prepare a retained earnings statement for the year ended December 31, 2022. (List items that increase retained earnings first.)

Prepare a classified balance sheet at December 31, 2022. (List current assets in order of liquidity and property, plant and equipment in order of land, buildings and equipment.)

Answer 1

Skysong Wholesale Company
Multistep Income Statement
For the Year Ended December 31st, 2022
Sales Revenue=(A)	$       9,21,400.00
Less: Sales Discount=(B)	$             5,300.00
Net Sales=(C )=(A)-(B)		$         9,16,100.00
Cost of goods sold=(D)		$         7,09,200.00
Gross Profit(Net Sales-Cost of goods sold)=(E )=(c )-(D )		$         2,06,900.00
Operating Expenses
Salaries & Wages Expense	$           50,600.00
Depreciation Expense-Building	$             7,300.00
Depreciation Expense-Equipment	$             6,300.00
Utilities Expense	$           10,700.00
Maintenance & Repairs Expense	$             8,200.00
Insurance Expense	$             4,100.00
Advertising Expense	$             4,500.00
Total Operating Expenses=(F )		$            91,700.00
Operating Income(Gross Profit-Operating Expenses)= (G)=(E )-(F)		$         1,15,200.00
Other expenses and losses
Interest Expense=(H)		$               3,800.00
Income before Tax=(I)=(G)-(H)		$         1,11,400.00
Income Tax=(J)		$            23,300.00
Net Income /Loss=(I)-(J)		$            88,100.00
Skysong Wholesale Company
Statement of Owner's Equity
	Common Stock	Retained Earning	Total shareholder's Equity
Balance	$       1,59,300.00	$            66,500.00	$           2,25,800.00
Add: Net Income		$            88,100.00	$               88,100.00
Less: Dividend		$             -9,300.00	$               -9,300.00
Owner's Equity	$       1,59,300.00	$         1,45,300.00	$           3,04,600.00
Skysong Wholesale Company
Balance Sheet as at 31/12/2022
Assets
Cash		$            31,100.00
Accounts Receivable		$            38,900.00
Inventory		$            71,800.00
Total Current Assets			$           1,41,800.00
Property,Plant and Equipment
Equipment	$           82,800.00
Accumulated Depreciation -Equipment	$         (46,100.00)	$            36,700.00
Building	$       1,99,300.00
Accumulated Depreciation -Building	$         (66,600.00)	$         1,32,700.00
Land		$            91,300.00	$           2,60,700.00
Total Assets			$           4,02,500.00
Liabilities & Stockholder's Equity
Accounts Payable		$            16,800.00
Interest Payable		$               3,800.00
Income Tax Payable		$            23,300.00
Total Current Liabilities			$               43,900.00
Long Term Liabilities
Notes payable			$               54,000.00
Stockholder's Equity
Total Stock holder's Equity			$           3,04,600.00
Total Liabilities and stockholder's equity			$           4,02,500.00