Reference no: EM132754594
Question - Penn Company has the following ledger accounts and adjusted balances as of December 31, 2019. All accounts have normal balances. Penn's income tax rate is 20%. Penn has 300,000 shares of $5 Common Stock authorized and 90,000 shares outstanding.
Accounts Payable 46,000
Accounts Receivable 324,000
Accumulated Depreciation-Building 90,000
Accumulated Depreciation-Equipment 72,000
Administrative Expenses 70,000
Allowance for Doubtful Accounts 36,000
Bonds Payable 300,000
Building 900,000
Cash 45,200
Common Stock 500,000
Cost of Goods Sold 684,000
Dividends 24,000
Equipment 348,000
Income from Operations of Division X 72,000
(Division X is a component of Penn Company)
Interest Revenue 48,000
Inventory 504,000
Land (held for future use) 360,000
Land (used for building) 198,000
Loss from Sale of Division X 144,000
(Division X is a component of Penn Company)
Loss on Sale of Investments 18,000
Mortgage Payable 450,000*
Paid-In Capital in Excess of Par 248,000
Premium on Bonds Payable 12,000
Prepaid Insurance 18,000**
Retained Earnings, January 1, 2019 530,000
Sales Discounts 36,000
Sales Returns and Allowances 60,000
Sales Revenue 1,842,000
Selling Expenses 36,000
Trademark 4,000
Treasury Stock 80,000
*$25,000 of the principal comes due in 2020.
**Two years insurance paid in advance.
Instructions - Use this information to prepare multiple-step income statement, a retained earnings statement, and a classified balance sheet.