Reference no: EM131367766

Q1. Balance Sheet Preparation

Presented below is the adjusted trial balance of Kelly Corporation at December 31, 2017.

	Debit	Credit
Cash	$ ?
Supplies	1,200
Prepaid Insurance	1,000
Equipment	48,000
Accumulated Depreciation-Equipment		$4,000
Trademarks	950
Accounts Payable		10,000
Salaries and Wages Payable		500
Unearned Service Revenue		2,000
Bonds Payable (due 2024)		9,000
Common Stock		10,000
Retained Earnings		25,000
Service Revenue		10,000
Salaries and Wages Expense	9,000
Insurance Expense	1,400
Rent Expense	1,200
Interest Expense	900
Total	$ ?	$?

Additional information:

1. Net loss for the year was $2,500.

2. No dividends were declared during 2017.

Instructions - Prepare a classified balance sheet as of December 31, 2017.

Q2. Balance Sheet Preparation

Presented below are a number of balance sheet items for Montoya, Inc., follow the current year, 2017.

Goodwill	$125,000	Accumulated depreciation-equipment	$292,000
Payroll taxes payable	177,591	Inventory	239,800
Bonds payable	300,000	Rent payable (short-term)	45,000
Discount on bonds payable	15,000	Income taxes payable	98,362
Cash	360,000	Rent payable (long-term)	480,000
Land	480,000	Common stock, $1 par value	200,000
Notes receivable	445,700	Preferred stock, $10 par value	150,000
Notes payable (to banks)	265,000	Prepaid expenses	87,920
Accounts payable	490,000	Equipment	1,470,000
Retained earnings	?	Debt investments (trading)	121,000
Income taxes receivable	97,630	Accumulated depreciation-buildings	270,200
Notes payable (long-term)	1,600,000	Buildings	1,640,000

Instructions - Prepare a classified balance sheet in good form. Common stock authorized was 400,000 shares, and preferred stock authorized was 20,000 shares. Assume that notes receivable and notes payable are short-term, unless stated otherwise. Cost and fair value of equity investments (trading) are the same.

Q3. Multiple-Step and Single-Step Statements

Two accountants for the firm of Elwes and Wright are arguing about the merits of presenting an income statement in a multiple-step versus a single-step format. The discussion involves the following 2017 information related to P. Bride Company ($000 omitted).

Administrative expense
Officers' salaries	$4,900
Depreciation of office furniture and equipment	3,960
Cost of goods sold	60,570
Rent revenue	17,230
Selling expense
Delivery expense	2,690
Sales commissions	7,980
Depreciation of sales equipment	6,480
Sales revenue	96,500
Income tax	9,070
Interest expense	1,860

Instructions:

(a) Prepare an income statement for the year 2017 using the multiple-step form. Common shares outstanding for 2017 total 40,550 (000 omitted).

(b) Prepare an income statement for the year 2017 using the single-step form.

(c) Which one do you prefer? Discuss.

Q4. Comprehensive Income

Roxanne Carter Corporation reported the following for 2017: net sales $1,200,000, cost of goods sold $750,000, selling and administrative expenses $320,000, and an unrealized holding gain on available-for-sale securities $18,000.

Instructions - Prepare a statement of comprehensive income, using (a) the one statement format, and (b) the two statement format. (Ignore income taxes and earnings per share.)

Q5. Comprehensive Income

C. Reither Co. reports the following information for 2017: sales revenue $700,000, cost o goods sold $500,000, operating expenses $80,000 and an unrealized holding loss on available-for-sale securities for 2017 of $60,000. It declared and paid a cash dividend of $10,000 in 2017.

C. Reither Co. has January 1, 2017, balances in common stock $350,000; accumulated other comprehensive income $80,000; and retained earnings $90,000. It issued no stock during 2017.

Instructions - Prepare a statement of stockholders' equity.