Using the trial balance, construct an income statement and balance sheet. Adiust
ID: 2610268 • Letter: U
Question
Using the trial balance, construct an income statement and balance sheet.
Adiusted Trial Balance December 31, 2015 Acct No Account Title Debit Credit 1001 Cash 1003 Cash -Money Market 1005 Receivables 1006 Allowance for doubtful accounts 1010 Merchandise inventories 1015 Prepaid expenses and other current assets 1110 Property and equipment 1111 Accumulated depreciation 2001 Accounts payable 2010 Accrued payroll and employee benefits 2012 Payroll taxes payable 2015 Interest payable 2017 Current portion of long term debt 2020 Income taxes payable 2210 Long term debt 2220 Other debt 3101 Preferred stock 3110 Common stock 3111 Additional paid-in capital 3120 Retained earnings 5001 Merchandise sales 5003 Services sales 6001 Cost of Merchandise Sales 6003 Cost of services sales 7001 Salares & Wages 7003 Payroll tax expense 7005 Employee benefits 7010 Advertising 7020 Rent 7023 Untilities 7025 Depreciation 7030 Bad debt expense 7040 Interest Expense 7050 Miscellaneous expense 7900 Income tax expense 28,500 216,500 10,500 1,000 80,000 7,500 360,000 30,000 35,000 16,000 4,500 1,500 15,000 50,000 10,500 500 150,000 235,000 710,000 82,000 415,000 53,000 25,000 8,400 5,400 15,000 14,000 4,500 30,000 1,000 1,500 200 65,000 1,341,000 1,341,000Explanation / Answer
**Retained earning at end =Beginning RE+ net income -dividend
= 235000+154000-0
= 389000
Income statement Revenue merchandise revenue 710000 service revenue 82000 Total revenue 792000 Less:cost of goods sold cost of merchandise sales 415000 cost of service sales 53000 (468000) Gross margin 324000 less:operating expense salaries and wages 25000 payroll tax expense 8400 Employee benefits 5400 Advertising 15000 Rent 14000 utilities 4500 Depreciation 30000 Bad debt expense 1000 Interest expense 1500 Miscellaneous expense 200 Total operating expense (105000) Income before tax 219000 less:Income tax expense (65000) Net Income 154000Related Questions
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