Reference no: EM13556005

Below is a trial balance for ABC Corporation for the year ended December 31, 20x1.  Certain items have been omitted to make the problem more interesting.

Required:  on a separate tab labelled "Answer" prepare an income statement for the year 20x1 and a balance sheet as of December 31, 20x1.  Both statements should be properly formatted and classified as illustrated in class and readings.  The grader should be able to follow your calculations in order for you to receive credit.

Operating income is $312,000.  Income tax expense is 40% of income before taxes.

Gross margin is 30% and current ratio is 4:1.  The allowance is 5% of the gross accounts receivable.

		Dr	Cr
Accounts payable			120,000
Accounts receivable		?
Accumulated depreciation			110,000
Allowance for bad debts			?
Cash		40,000
Common stock			50,000
Cost of goods sold		?
Depreciation expense		21,000
Dividends paid		20,000
Equipment		350,000
Income tax expense		?
Interest expense		12,000
Inventory		276,000
Investments		20,000
Notes payable			200,000
Other operating expense		20,000
Prepaid rent		12,000
Rent expense		?
Retained earnings (Jan 1, 20x1)			210,000
Salaries expense		482,000
Sales			3,000,000
Utilities expense		17,000