Reference no: EM13183248
It is the end of a reporting period. Because there are more people than usual retiring this year, your manager has asked your accounting department to create 2 things:
• A process documentation detailing the different methods of preparing income statements, specific sections of the income statement, and how to handle the special types of income statement items
• Basic financial statements for your company
o Select a company filing of your choice that contains a multiple-step income statement.
o Communicate your selection with your group (each of you should submit a different company).
o Submit the link to this filing as proof of your research.
2. Prepare a process documentation that
o is prepared in a professional manner because it will be the desktop guide used by others in the event of your absence to prepare the financial statements for Music Warehouse.
o is in the form of a memorandum or as a numbered listing of items, depending on your individual preference.
o includes the following elements:
- a definition and description of the specific sections of the income statement
- a description of the different methods of preparing income statements
- an explanation of the conceptual guidelines for reporting income
- how to handle the special types of income statement items
Using the information below, do the following:
• Prepare a multiple-step income statement for Music Warehouse.
• Prepare a statement of changes in stockholder's equity for Music Warehouse.
|
Music Warehouse
|
|
Adjusted Trial Balance
|
|
December 31, 2008
|
|
|
|
Cash
|
Debit
$24,675
|
Credit
|
|
Accounts Receivable
|
5,625
|
|
|
Inventory
|
65,980
|
|
|
Land
|
93,000
|
|
|
Building
|
289,000
|
|
|
Accumulated Depreciation
|
|
75,000
|
|
Notes Payable
|
|
85,000
|
|
Accounts Payable
|
|
53,600
|
|
Interest Payable
|
|
4,750
|
|
Common Stock
|
|
10,000
|
|
Additional Paid-in Capital
|
|
120,000
|
|
Dividends
|
10,000
|
|
|
Retained Earnings
|
|
59,980
|
|
Sales
|
|
937,500
|
|
Sales Discounts
|
22,675
|
|
|
Cost of Goods Sold
|
723,000
|
|
|
Salaries
|
81,000
|
|
|
Utilities
|
8,900
|
|
|
Repairs & Maintenance
|
5,225
|
|
|
Telephone
|
2,850
|
|
|
Interest Expense
|
4,400
|
|
|
Depreciation Expense
|
9,500
|
|
|
$1,345,830
|
$1,345,830
|
The following is additional information needed for financial-statement preparation:
• Loss as a result of hurricane damage on the building: $17,000 (assume that the building is not located in an area that sustains frequent hurricane damage.)
• Loss because of the discontinuation of the cassette tape music segment: $26,875
• Beginning of the year balance of common stock: $8,000 (assume that changes are related to issuance of common stock.)
• Beginning of the year balance of additional paid-in capital: $102,000
• Effective income tax rate: 35%
Objective:
• Understand the concepts of income, explain the conceptual guidelines for reporting income, and define the elements of an income statement.
• Classify the assets and liabilities of a balance sheet, explain the statement of changes in stockholders' equity, and describe the Security and Exchange Commission (SEC) integrated disclosures and the major components of an income statement, compute income from continuing operations, and report the results from discontinued operations.
|
Value and present financial statements
: Assess financial accounting standards as they relate to presentation and disclosure in general purpose financial statements and evaluate, measure, value and present financial statements in conformity with GAAP relating to assets
|
|
Depict the mechanism of the reaction of acetone
: draw the mechanism of the reaction of acetone and cis-1,2- cyclohexanediol in the presence of hydrochloric acid to form the acetonide 3?
|
|
State benzoic acid and the equilibrium for each ph value
: the indicated ph value for the titration of 50.00 ml of .100 M benzoic acid (ka = 6.3 x 10^-5) with .0500 M KOH: ph = 4.20, 4.50.8.06, 11.50. write te reaction for KOH reacting with benzoic acid and the equilibrium for each pH value
|
|
How much will profits be affected
: John Smith, C.E.O. of A.B.Co. is attempting to estimate the quantity of his product that will be demanded during April. At the current price of $20.00, A.B. Co. is selling 100,000 units per month. Mr. Smith has been informed th..
|
|
Define the elements of an income statement
: Understand the concepts of income, explain the conceptual guidelines for reporting income, and define the elements of an income statement.
|
|
Explain what compound is this nmr displaying
: Looks like 4-Methyl-2-Pentanone to me, can someone verify and explain in depth why it's such compound ... NMR picture in the comment below
|
|
State the production of fluorine-containing compounds
: Carbonyl fluoride, COF2, is an important intermediate used in the production of fluorine-containing compounds. For instance, it is used to make the refrigerant carbon tetrafluoride, CF4 via the reaction
|
|
Explain how park bank uses a marr
: The good people at Cooper Bank are looking at five mutually exclusive alternatives that have a ten-year life and no salvage value. Due to intellectual property concerns, they can only invest in one project. Park Bank uses a MARR of 9%. Which one..
|
|
State how many different aldols b-hydroxyaldehydes
: How many different aldols (b-hydroxyaldehydes), including constitutional isomers and stereoisomers,
|