Prepare the companys income statement

Assignment Help Financial Accounting

Reference no: EM131195817

Financial Statements : The Stern Company uses a perpetual inventory system and has prepared the following

adjusted trial balance on December 31, 2007:

	Debit	Credit
Cash	$ 2,000
Accounts receivable	2,700
Allowance for doubtful accounts		$ 250
Inventory	6,500
Prepaid insurance	800
Land	5,200
Buildings and equipment	31,000
Accumulated depreciation		15,000
Accounts payable		3,100
Salaries payable		420
Unearned rent		360
Income taxes payable		2,625
Note payable (due July 1, 2011)		5,000
Interest payable (due July 1, 2011)		750
Capital stock (1,500 shares)		9,000
Retained earnings, January 1, 2007		6,770
Dividends distributed	1,200
Sales revenue		33,000
Sales returns	2,100
Rent revenue		1,440
Cost of goods sold	15,040
Selling expenses	4,800
Administrative expenses	3,000
Interest expense	750
Income tax expense	2,625
Totals	$77,715	$77,715

Required

Prepare in proper form for 2007 the company's:

(1) income statement,

(2) retained earnings statement,

(3) ending balance sheet, and

(4) closing entries in its general journal.

Reference no: EM131195817

Questions Cloud

Incremental cash flows of a project : Sunk cost - a cash flow already paid or accrued. These costs should not be included in the incremental cash flows of a project. From an emotional standpoint, it does not matter what investment has already been made.

Determine the amount of income to be reported : Determine whether the taxpayer in each of the following situations has realized income.- Explain why there has or has not been a realization, and determine the amount of income to be reported.

Additional interest in the future periods : In order to obtain the future value of the principal amount, you calculate what the value at the end of the time period will be assuming the initial investment will earn interest, which is reinvested and will earn additional interest in the future..

Competitiveness in the global financial services industry : Reflect on the impact of assessment on your understanding of the Global Financial services industry competition, highlighting the key role of strategic alliances and corporate leadership in sustaining growth through responsible banking.

Prepare the companys income statement : Prepare in proper form for 2007 the company's income statement, retained earnings statement, ending balance sheet, and closing entries in its general journal.

What new key information did you find in your discussion : What new, key information did you find in your discussion or your research or after reading another Group's Presentation that supported your position?

What do you recommend to management : You estimate that at least six weeks are needed to find and fix the problems. In addition, even more time is required to find and fix 15 additional, less severe bugs just uncovered by the QA team. What do you recommend to management?

Explain the impact of flotation cost : In your own words, how would you explain the impact of flotation cost of the proposed initiative to the founder who is not fluent in corporate finance?

Contrast the opinion provided by the independent auditor : Contrast the opinion provided by the independent auditor concerning management's assessment of internal controls over the financial reporting system with the audit opinion on the financial statements in general.

User Account

All Pages