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Accounting

Help with practice problems.

1.Given the following year-end balances, prepare an income statement, statement of retained earnings, and a classified balance sheet.

Accounts payable $2,550
Accounts receivable 3,550
Accumulated depreciation 6,250
Beginning retained income 6,450
Cash 2,300
Cost of goods sold 52,300
Depreciation expense 2,500
Dividends declared 8,800
Fixed assets 29,000
Income tax expense 10,700
Interest expense 1,150
Inventory 6,250
Long-term note payable 11,500
Paid-in capital 4,450
Prepaid rent 350
Rent expense 4,000
Sales 118,600
Wage expense 31,900
Wages payable 3,000

Solution Preview

Income statement:
Sales ------------------------------- $118,600
Cost of goods sold ---------------- ($52,300)
=============================
Gross Margin ------------------------$66,300
Depreciation expenses -------------($2,500)
Interest expenses ------------------($1,150)
Rent expenses ----------------------($4,000)
Wage expenses -------------------($31,900)
============================
Income before tax ...

$2.19