Solution-Prepare an income statement for the year

Prepare an income statement for the year

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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

Reference no: EM13556005

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Prepare an income statement for the year

Reference no: EM13556005

Reference no: EM13556005

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