Reference no: EM132978243
Question - Express Corporation's capital structure consists of 20,000 common shares. On December 31, 2016 an analysis of the accounts and discussions with company officials revealed the following information:
Sales................................................................................................. $1,200,000
Purchase discounts.......................................................................... 18,000
Purchases........................................................................................ 720,000
Earthquake loss (net of $18,000 tax) .............................................. 42,000
Selling expenses.............................................................................. 128,000
Cash................................................................................................. 60,000
Accounts receivable......................................................................... 90,000
Common shares............................................................................... 200,000
Accumulated depreciation................................................................ 180,000
Dividend revenue............................................................................. 18,000
Inventory, January 1, 2016.............................................................. 152,000
Inventory, December 31, 2016......................................................... 125,000
Unearned service revenue............................................................... 4,400
Accrued interest payable................................................................. 1,000
Land.................................................................................................. 370,000
Patents............................................................................................. 100,000
Retained earnings, January 1, 2016................................................ 270,000
Interest expense............................................................................... 17,000
Cumulative effect of change from straight-line to accelerated depreciation (net of $15,000 tax)..................................................... 35,000
General and administrative expenses............................................. 160,000
Dividends declared........................................................................... 29,000
Allowance for doubtful accounts...................................................... 5,000
Notes payable (maturity July 1, 2019)............................................. 200,000
Machinery and equipment................................................................ 450,000
Materials and supplies...................................................................... 40,000
Accounts payable............................................................................. 60,000
Note: Tax rate: 30%.
Required -
a) Prepare, in good form, a multiple-step income statement.
b) Prepare, in good form, a retained earnings statement.