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Presented below are the amounts of assets and liabilities of Arnold Corp. as of December 31,...

Presented below are the amounts of assets and liabilities of Arnold Corp. as of December 31, 2018, and revenues and expenses of the company for the year ended on that date.

Sales $ 18,000,000

Cost of Goods Sold $ 13,500,000

Wages Expense $ 2,700,000

Common Stock $ 2,250,000

Cash $ 2,059,650

Building $ 1,350,000

Mortgage Payable - Long Term $ 1,012,500

Notes Payable - Long Term $ 675,000

Marketing Expense $ 607,500

Accounts Receivable $ 517,500

Equipment $ 450,000

Accounts Payable $ 427,500

Income Tax Expense $ 405,000

Wages Payable $ 382,500

Dividends $ 337,500

Inventory $ 270,000

Land $ 225,000

Accumulated Depreciation $ 202,500

Utilities Expense $ 162,000

Rent Expense $ 112,500

Short-term Investments $ 112,500

Depreciation Expense $ 78,750

Retained Earnings Balance 12-31-16 $ 67,500

Rent Revenue $ 67,500

Interest Revenue $ 63,000

Supplies $ 56,250

Insurance Expense $ 54,000

Delivery Expense $ 38,250

Prepaid Insurance $ 36,000

Supplies Expense $ 29,250

Interest Expense $ 27,000

Prepaid Rent $ 27,000

Property Tax Expense $ 13,500

Interest Payable $ 9,000

Miscellaneous Revenue $ 6,750

Taxes Payable $ 5,400

Requirements:

1. Prepare the company's multi-step income statement for the year ended December 31, 2018.

2. Prepare the company's statement of retained earnings for the year ended December 31, 2018.

3. Prepare the company's classified balance sheet at December 31, 2018.

business   accounting   
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Answer #1

In the books of Arnold Cor Multi Step Income Statement for the vear ended 31st December 2018: Particulars Sales Less: Cost of goods sold Gross Profit Less: Operating Expenses Amount S 18,000,000 (13,500,000) 4,500,000 Wages Expense Marketing Expense Utilities Expense Rent Expense Insurance E Delivery Expense Supplies Expense Property Tax Expense (2,700,000) (607,500) (162,000) (112,500) (54,000) (38,250) (29,250) (13,500) 783,000 (78,750) 704,250 (27,000) 677,250 (405,000) 272,250 Income before Depreciation, Interest and Taxes Less: Depreciation expense Income before Interest and Taxes Less:Interest Expense Income before Taxes ess: Income tax expense Net Income Other Income: Rent Revenue Interest Revenue Miscellaneous Revenue 67,500 63,000 6,750 137,250 409,500 Total Other Income Net Income Retained earnings statement for the vear ended 31st December 2018:- Particulars Retained Earnings Balance 01-01-18 Add: Net Income Less: Dividends Retained Earnings Balance 12-31-18 Amount S 67,500 409,500 (337,500) 139,500In the Books of Arnold Cor Balance Sheet as at December 31, 2018: Assets Current Assets: Amount Liabilities and Shareholders Equi Amount S Current Liabilities: as Accounts Receivable Inventory Short-term Investments 2,059,650 Accounts Payable 517,500 Wages Payable 270,000 Interest Payable 112,500 Taxes Payable 427,500 382,500 9,000 5,400 824,400 Supplies Prepaid Insurance Prepaid Rent 56,250 Total Current Liabilities (A) 36,000 27,000 Non-Current Liabilitiess: Total Current Assets (A) 3,078,900 Mortgage Payable - Long Term Notes Payable - Long Term 1,012,500 675,000 1,687,500 Non-Current Assets: Total Non-Current Liabilities (B) Provertu, Plant and Eauipment Land Building Equipment Less: Accumulated Depreciation 225,000 Shareholders Equiti- 1,350,000 Common Stock 450,000 Retained earnings (202,500) Total Shareholders Equity (C) 1,822,500 4,901,400 Liabilities and Shareholders Equity (A+B+C) 2,250,000 139,500 2,389,500 Net Fixed Assets (B) Total Assets (A+B) 4,901,400

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