Reference no: EM131781577

Preparation of Financial Statements

Barker Company has the following ledger accounts and adjusted balances as of December 31, 2016. All accounts have normal balances.

Barker's income tax rate is 40%. Barker has 300,000 shares of Common Stock authorized. You will need to determine the number of shares issued and the number of shares outstanding for your balance sheet.

Accounts Payable.................................. 24,000

Accounts Receivable.............................. 180,000

Accumulated Depreciation-Building............ 50,000

Administrative Expenses......................... 40,000

Allowance for Doubtful Accounts............... 22,000

Bonds Payable (Mature 2020)................... 300,000

Building............................................. 400,000

Cash................................................. 26,000

Common Stock.................................... 325,000

Cost of Goods Sold............................... 380,000

Discount on Bonds Payable...................... 50,000

Dividends.......................................... 20,000

Income from Operations of Division X........ 40,000

(Division X is a component of Barker Company)

Interest Revenue................................... 10,000

Inventory............................................ 280,000

Land................................................. 2 00,000

Loss from Fire....................................... 70,000

Loss from Sale of Division X........................... 80,000

(Division X is a component of Barker Company)

Paid-In Capital in Excess of Par.................. 75,000

Patent................................................ 30,000

Prepaid Rent........................................ 10,000*

Retained Earnings, January 1, 2016.............250,000

Sales Revenue......................................900,000

Selling Expenses.................................. 130,000

*Two years rent paid in advance for offsite document storage.

Instructions:

Use this information to prepare a multiple-step income statement and a classified balance sheet.