The trial balance of Brandon Beauty Supply, Inc., dated Decern- P.O. 3,7 her 31 of this year, is shown here.

To reduce the number of accounts in the trial balance, Selling Expenses (con¬
trol) is used in place of all selling expenses. Likewise, General Expenses (control)
is used in place of all general expenses.
The corporation’s charter states that authorized preferred 9 percent stock amounts to 2,000 shares and authorized common stock amounts to 20,000 shares.
Data for the adjustments are as follows:

a.-b. Merchandise Inventory, December 31 (ending inventory), $576,570.

c. Additional depreciation of equipment for the year amounts to $12,870;
record depreciation under Selling Expenses (control).

d. Insurance expired during the year, $1,542; record insurance expired under General Expenses (control).

e. Analysis of Accounts Receivable indicates that $10,560 is uncollectible;
record estimated bad debt losses under General Expenses (control).

f. Accrued interest on Notes Receivable, $360.
g. Additional income tax due for this year, $25,680.
h. No dividends were declared during the year.
Instructions 1. Record the trial balance on the work sheet (leave two lines for General Expenses control) and complete the work sheet for the year.
2. Prepare an income statement.
3. Prepare a statement of retained earnings.
4. Prepare a classified balance sheet.

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ACCOUNT NAME Cash Notes Receivable Accounts Receivable DEBIT 1404000 CREDIT 2892000 315 0 4800 Allowance for Doubtful Accounts 538200 Subscriptions Receivable, Preferred 9 Percent Stock 25 80000 Merchandise Inventory Prepaid Insurance Equipment Accumulated Depreciation, Equipment Organization Costs Accounts Payable Preferred 9 Percent Stock ($100 par value) Preferred 9 Percent Stock Subscribed Premium on Preferred 9 Percent Stock Common Stock ($20 stated value) Paid-in Capital in Excess of Stated Value Retained Earnings Sales Purchases Purchases Discount Freight In Selling Expenses (control) General Expenses (control) Income Tax Expense Interest Income 560 22000 259200 170 22000 1920000 2 578 58000 107 44000 397 89000 112 20000 84 54000 4 416690 00 3219000 1462 9800 150 000 00 3000000 660000 30000000 3600000 156 000 00 3 535 200 00 1560000 342000 4 416 69000