Preparing Both an Income Statement and a Balance Sheet from a Trial Balance

Jordan Sales Company (organized as a corporation on April 1, 2011) has completed the accounting cycle for the second year, ended March 31, 2013. Jordan also has completed a correct trial balance as follows:

Required:
Complete the financial statements as follows:
a. Classified (multiple-step) income statement for the reporting year ended March 31, 2013. Include income tax expense, assuming a 25 percent tax rate. Use the following subtotals: Gross Profit, Total Operating Expenses, Income from Operations, Income before Income Taxes, and Net Income, and show EPS.
b. Classified balance sheet at the end of the reporting year, March 31, 2013. Include (1) income taxes for the current year in Income Taxes Payable and (2) dividends in Retained Earnings. Use the following captions (list each item under these captions).
Assets Stockholders' Equity
Current assets Contributed capital
Noncurrent assets Retained earnings
Liabilities
Current liabilities
Long-termliabilities

Transcribed Image Text:

JORDAN SALES COMPANY Trial Balance At March 31, 2013 Account Titles Credit Debit $ 58,000 Cash Accounts receivable 49,000 Office supplies inventory Automobiles (company cars) Accumulated depreciation, automobiles Office equipment Accumulated depreciation, office equipment Accounts payable Income taxes payable Salaries and commissions payable Note payable, long-term Capital stock (par $1; 33,000 shares) Paid-in capital Retained earnings (on April 1, 2012) Dividends declared and paid during the current year 1,000 34,000 $ 14,000 3,000 1,000 22,000 2,000 33,000 33,000 5,000 7,500 10,500 Sales revenue 99,000 Cost of goods sold Operating expenses (detail omitted to conserve time) Depreciation expense (on autos and including $500 on office equipment) Interest expense Income tax expense (not yet computed) 33,000 19,000 8,000 1,000 $216,500 $216,500 Totals