Memphis Ltd. is a private corporation reporting under ASPE. It has recorded all necessary adjusting entries at its fiscal year end, October 31, 2021. The following information has been taken from the adjusted trial balance:

All accounts have normal balances and total assets equal $938,460. Memphis has a 20% income tax rate.

Instructions

a. Prepare a multiple-step income statement for the year.

b. Prepare a statement of retained earnings for the year.

c. Prepare closing entries.

d. Post the closing entries to the Income Summary and Retained Earnings accounts and compare with the financial statements.

Taking It Further

If Memphis Ltd. followed IFRS instead of ASPE, which statements would you prepare?

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Accounts payable Cash dividends-common Common shares Depreciation expense Dividends payable Income tax expense Income tax payable Insurance expense Interest expense Notes payable Rent expense Retained earnings (Nov. 1, 2020) Salaries expense Service revenue Unearned revenue $ 1,400 55,000 38,800 610,000 175,750 385,000 $ 18,000 40,000 150,000 15,250 10,000 29,740 2,500 5,100 14,000