Question

1. The following items, listed in alphabetical order, are taken from the records of Grizzly Inc., a chain of outdoor recreational stores in the Northwest. Use the items to prepare two statements. First, prepare an income statement for the year ended December 31, 2016. The income statement should be in multiple-step form. Second, prepare a classified balance sheet at December 31, 2016. All amounts are in thousands of dollars.

Accounts payable	$    6,500		Income tax expense	$  9,000
Accounts receivable	8,200		Insurance expense	2,000
Accumulated depreciation—buildings	35,000		Interest expense	10,000
Accumulated depreciation—furniture and fixtures	15,000		Interest payable	1,000
Advertising expense	3,100		Interest revenue	12,000
Buildings	76,000		Land	104,000
Capital stock, $1 par, 10,000 shares issued and outstanding			Long-term notes payable, due December 31, 2024	110,000
	20,000		Merchandise inventories	7,000
Cash	2,400		Office supplies	900
Commissions expense	8,600		Paid-in capital in excess of par value	40,000
Cost of goods sold	105,000		Prepaid rent	1,000
Depreciation on buildings	2,500		Rent expense for salespeople's autos	9,000
Depreciation on furniture and fixtures	1,200		Retained earnings	28,800
Furniture and fixtures	58,000		Salaries and wages for office staff	11,000
Income taxes payable	1,200		Sales revenue	170,000

Answer 1

Grizzly Inc
Income Statement
For the year ended 31st december 2016
	$ '000	$ '000	$ '000
Sales		170000
Less :Cost of Gods Sold		105000
Gross Profit			65000
Operating Expenses
Selling Expenses
Advertising Expense	3100
Commission Expense	8600
Rent expense for salespeople's auto	9000
Depreciation - Furniture & fixture	1200
Total Selling expenses		21900
General & Administrative Expenses
Depreciation- Buildings	2500
Insurance	2000
Salaries & wages for office staff	11000
Total General & Administrative expenses		15500
Total Operating Expense			37400
Income from Operations			27600
Other revenues & Expenses
Interest Revenue	12000
Interest Expense	(10000)
Excess of other expense over other revenues			2000
Income Before Income Tax			25600
Less : Income Tax expense			9000
Net Income			16600
Classified Balance sheet
	Grizzly Inc
	Balance sheet
	At Deecember 31, 2016
	(In thousands of dollars)
	Assets	$ '000	$ '000
Current Assets:
Cash		2400
Accounts receivable		8200
Merchandise Inventories		7000
Office Supplies		900
Prepaid rent		1000
Total Current Assets			19500
Property Plant & Equipment
Land		104000
Building	76000
Accumulated depreciation	(35000)	41000
Furniture & Fixture	58000
Accumulated depreciation	(15000)	43000
Total Property, Plant & Equipment			188000
Total Assets				207500
	Liabilities	$ '000	$ '000	$ '000
Current Liabilities
Accounts Payable		6500
Income Taxes Payable		1200
Interest Payable		1000
Total Current Liabilities			8700
Long term notes payable, Due Dec 31, 2024			110000
Total Liabilities				118700
	Stokholders's equity
Contributed Capital
Capital Stock, $1 par, 10000 shares
Issued & outstanding			20000
Paid in Capital in excess of par value			40000
Total Contributed Capital			60000
Retained Earnings			28800
Total Stockholder equity				88800
Total Liability & stock holder equity				207500