Multiple-Step Income Statement:
Using the information below, do the following:
1). Prepare a multiple-step income statement for Music Warehouse.
2). Prepare a statement of changes in stockholder's equity for Music Warehouse.
Music Warehouse
Adjusted Trial Balance
31-Dec-08
|
Debit |
Credit |
| Cash |
$24,675 |
|
| Accounts Receivable |
5,625 |
|
| Inventory |
65,980 |
|
| Land |
93,000 |
|
| Building |
289,000 |
|
| Accumulated Depreciation |
|
75,000 |
| Notes Payable |
|
85,000 |
| Accounts Payable |
|
53,600 |
| Interest Payable |
|
4,750 |
| Common Stock |
|
10,000 |
| Additional Paid-in Capital |
|
120,000 |
| Dividends |
10,000 |
|
| Retained Earnings |
|
59,980 |
| Sales |
|
937,500 |
| Sales Discounts |
22,675 |
|
| Cost of Goods Sold |
723,000 |
|
| Salaries |
81,000 |
|
| Utilities |
8,900 |
|
| Repairs & Maintenance |
5,225 |
|
| Telephone |
2,850 |
|
| Interest Expense |
4,400 |
|
| Depreciation Expense |
9,500 |
|
|
$1,345,830 |
$1,345,830 |
The following is additional information needed for financial-statement preparation:
1). Loss as a result of hurricane damage on the building: $17,000 (assume that the building is not located in an area that sustains frequent hurricane damage.)
2). Loss because of the discontinuation of the cassette tape music segment: $26,875
3). Beginning of the year balance of common stock: $8,000 (assume that changes are related to issuance of common stock.)
4). Beginning of the year balance of additional paid-in capital: $102,000
5). Effective income tax rate: 35%