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Prepare an Income Statement and Statement of Retained Earnings

Prepare an income statement and a statement of retained earnings for Big Sky Corporation forthe year ended June 30, 2006, based on the following information:

Capital stock (1,500 shares @ $100) . . . . . . . . . . . . . . . . . . . . . . . . . . $150,000
Retained earnings, July 1, 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76,800
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,500
Ski rental revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77,900
Expenses:
Rent expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,000
Salaries expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38,600
Utilities expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,400
Advertising expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,500
Miscellaneous expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,700
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,100 64,300

Solution Summary

Prepare an income statement and a statement of retained earnings for Big Sky Corporation forth year ended June 30, 2006, based on the following information.

$2.19