Preparation of income statement and classified balance sheet.
Preparing Financial Statements
The following account balances are provided for Rustic Company at December 31, 2007. Revenue and expenses accounts cover the fiscal year ending on that date. All numbers are dollars except shares outstanding.
|
Account
|
Amount
|
|
Accounts payable
|
$14,000
|
|
Accounts receivable
|
18,000
|
|
Accumulated depreciation
|
30,000
|
|
Cash
|
6,000
|
|
Common stock, par value
|
20,000
|
|
Cost of goods sold
|
35,000
|
|
Current portion of long-term debt
|
2,000
|
|
Income taxes
|
6,000
|
|
Interest expense
|
4,000
|
|
Interest payable
|
500
|
|
Inventory
|
34,000
|
|
Long-term debt
|
40,000
|
|
Net income
|
12,000
|
|
Paid-in capital in excess of par
|
30,000
|
|
Patents and trademarks
|
4,000
|
|
Prepaid insurance
|
2,500
|
|
Property, plant and equipment, cost
|
150,000
|
|
Retained earnings
|
78,000
|
|
Sales revenues
|
110,000
|
|
Selling, general, and administrative expenses
|
65,000
|
|
Service revenues
|
12,000
|
|
Supplies
|
3,000
|
|
Wages pyable
|
3,000
|
|
Shares outstanding
|
20,000
|
A. Prepare an income statement in good form for Rustic Company.
B. Prepare a classified balance sheet.