Question

Financial Statements Jane Corporation's capital structure consists of 50,000 shares of common stock. At December 31, 2017 an analysis of the accounts and discussions with company officials revealed the following information: Sales revenue Discontinued operations loss (net of tax) Selling expenses Cash Accounts receivable Common stock Cost of goods sold Accumulated depreciation-machinery Dividend revenue Uneamed service revenue Interest payable Land $1,500,000 63,360 120,000 60,000 90,000 133,500 700,000 180,000 12,000 Retained earnings, January 1, 2017 Interest expense Administrative expenses Dividends declared Allowance for doubtful accounts Notes payable (maturity 7/1/20) Machinery Inventory Accounts payable Income Taxes 1,000 370,000 100,000 270,000 21,000 50,000 24,000 5,000 200,000 450,000 40,000 60,000 177,140 Instructions (a) Prepare a multiple-step income statement. (b) Prepare a retained earnings statement. (c) Prepare a balance sheet statement.

Answer 1

Income Statement
Sales Revenue	1,500,000
Cost of Goods Sold	-700000
Gross Margin	800,000
Dividend Revenue	12000
Unearned Service Revenue	4000
Non - Operaing Income	16000
Selling Expenses	-120000
Interest Expenses	-21000
Admin Expenses	-150000
Allowance for Doubtful Debts	-5000
Total Expenses	-296000
Profit before tax	520,000	(800000+16000-296000)
Retained Earnings Statement
Retained Earning Opening	270,000
Current Year Profit	520,000
Discontinued Operations loss	(63,360)
Dividends Declared	(24,000)
Income Taxes	(177,140)
Closing	525,500
Balance Sheet
Common Stock	133,500	Land	370,000
Retained Earnings	525,500	Patents	100,000
Accumulated Depreciation	180,000	Machinery	450,000
Interest Payable	1,000	Inventory	40,000
Allowance for Doubtful Debts	5,000	Cash	60,000
Notes Payable	200,000	Accounts Receivable	90,000
Accounts Payable	60,000	Dividend Receivable	12,000
Dividends payable	21,000	Unearned Service Revenue	4,000
Total	1,126,000		1,126,000