Reference no: EM132706814
Question - Elements from the adjusted trial balance for Maggie Co., a retailer, for the fiscal year end (12/31) 2015 are:
Accounts Receivable $555,000
Accumulated Depr.-equipment 450,000
Accumulated Depr.-buildings 360,000
Allowance for doubtful accts. 36,000
Common Stock 2,000,000
Depreciation Expense (equipment) 50,000
Depreciation Expense (buildings) 60,000
Dividends (common stock) 120,000
Dividends Payable 30,000
Insurance Expense 35,000
Interest Expense 40,000
Interest Payable 20,000
Notes Payable (1/1/25) 1,000,000
Prepaid Insurance 95,000
Purchases 975,000
Rent Receivable 15,000
Rent Revenue 90,000
Retained Earnings (1/1/15) 818,000
Salaries Expense 775,000
Salaries Payable 25,000
Sales Returns 13,000
Sales Revenue 2,975,000
Additional information, not contained in the above, is as follows:
a. Bad Debt expense of $12,000 for 2015 has not yet been recorded.
b. An internal audit discovered that amortization expense of intangible assets for 2013, 2014 and 2015 was not recorded by the amount of $41,000 per year (no closing entries for 2015 have been made).
c. The company sold its only investment in held-to-maturity securities during the current year at a gain of $145,000. This gain is considered unusual in nature and infrequent in occurrence.
d. At the beginning of 2015, Maggie sold equipment for $50,000. The machine originally cost $76,000 and had accumulated depreciation of $32,000.
e. The company totally discontinued its mining operations during the year. The loss on operations of the discontinued subsidiary was $80,000 before taxes while there was a gain on disposal of mining assets of $120,000 before taxes.
f. Maggie uses a periodic inventory system and Inventory (1/1/15) is $175,000 and Inventory (12/31/15) is $225,000.
g. Unrealized (holding) gain on available-for-sale securities, net of tax, for 2015 is $32,000.
Required - Prepare in good form an income statement/statement of comprehensive income (multiple step) and a statement of retained earnings for the year ended 2015. Assume a 30% tax rate unless indicated otherwise. Maggie has 500,000 shares of common stock outstanding on December 31, 2015.