Question

Cara's Cookie Company

Adjusted Trial Balance (Selected Accounts)

For the Current Year Ended

Account

Debit

Credit

Common Stock (no par): Beginning Balance

$466,000

Retained Earnings: Beginning Balance

2,100,000

Accumulated Other Comprehensive Income: Beginning Balance

$71,000

Dividends

77,000

Sales

1,600,000

Interest Income

5,200

Dividend Income

3,600

Gain on Disposal of Plant Assets

78,000

Unrealized Gain on Trading Securities

41,000

Gain on Sale of Discontinued Operations-Before Tax

60,000

Unrealized Gain on Available-for-Sale Bonds-Before Tax

4,500

Cost of Goods Sold

530,000

Selling Expenses

51,000

Office Salaries Expense

83,000

Legal Fees-General

8,600

Sales Salaries Expense

27,000

Advertising Expense

21,000

Office Supplies Expense

72,000

Accounting Fees-Administrative

24,000

Amortization Expense-General

18,000

Depreciation Expense-General

29,000

Interest Expense

7,500

Loss on Asset Impairment

10,600

E5-7 (similar to) E Question Help Cara's Cookie Company provided the following accounts from its year-end trial balance (Click the icon to view the year-end trial balance accounts.) The company is subject to a 35% income tax rate Requirement Prepare a multiple-step income statement for the current year. Prepare Cara's multiple-step income statement for the current year, one section at a time (List the subheadings in the order they are typically shown on a multi-step income statement. Use parentheses or a minus sign to enter other expenses or a loss) Cara's Cookie Company Statement of Net Income For the Current Year Ended Less:

Answer 1

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Cara's Cookie Company
Income Statement for the year ended December 31.
Particulars	Amount $	Amount $
Sales Revenue	1,600,000.00
Less: returns and allowances	-
Net Sales		1,600,000.00
Cost of goods sold		530,000.00
Gross Profit		1,070,000.00
Selling expense	51,000.00
Sales Salaries Expense	27,000.00
Advertising Expense	21,000.00
Depreciation Expense- General	29,000.00
Amortization Expense- General	18,000.00
Office Salaries Expense	83,000.00
Office Supplies Expense	72,000.00
Legal Fees- General	8,600.00
Accounting Fees- Administrative	24,000.00
Operating Expense		333,600.00
Operating Income		736,400.00
Interest Income	5,200.00
Dividend Income	3,600.00
Gain on disposal of assets	78,000.00
Unrealized Gain on trading securities	41,000.00
Loss on asset impairment	(10,600.00)
Interest expense	(7,500.00)
Other expense and income		109,700.00
Income before tax		846,100.00
Tax expense
Income from continuing operations		846,100.00
Gain on Discontinued Operations before tax		60,000.00
Net Income		906,100.00
Other Comprehensive Income		Amount $
Unrealized Gain on Available for sale Bonds		4,500.00
Net Income		4,500.00

Statement of Stockholder's equity
	Common Stock	Retained Earnings	Other Comprehensive Income	Total
Opening Balance	466,000.00	2,100,000.00	71,000.00	2,637,000.00
Dividends		(77,000.00)		(77,000.00)
Income		906,100.00	4,500.00	910,600.00
Closing Balance	466,000.00	2,929,100.00	75,500.00	3,470,600.00