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1.Balance sheet Prepare a classified balance sheet in proper form. The term proper form implies the inclusion of 4 columns for classification of account titles

1.Balance sheet

Prepare a classified balance sheet in proper form. The term proper form implies the inclusion of 4 columns for classification of account titles and dollar amounts, the listing of account titles under the correct headings and in proper order. For example, current assets are listed in order of liquidity. The appropriate use of dollar signs and rulings (underscores). Strive for professionalism.

INCOME STATEMENT

Beautiful by Design, Inc.

Income Statement

For the Year Ended December 31, 20xx

Revenue

Sales Revenue .........................................

$15,850,000

Design Revenue .

4,650,000

Net Revenue ........................................

$20,500,000

Cost of Goods Sold .................................

4,962,500

Gross Profit.

15,537,500

Operating Expenses

Selling Expenses

Sales Commissions.......................

$2,000,000

Advertising Expense .....................

750,000

2,750,000

Administrative Expenses

Wages Expense.............................

4,000,000

Rent Expense ..............................

1,150,000

Depreciation Expense ..................

1,128,750

Supplies Expense.........................

700,750

Restructuring Costs

50,000

Bad Debt Expense..

10,000

Insurance Expense..

10,000

7,049,500

9,799,500

Income from Continuing Operations

5,738,000

Other Income/Gains (Expense/Losses)

Interest Revenue .................................

2,000

Interest Expense ..................................

(201,250)

Loss on Sale of Equipment.

(400,000)

(599,250)

Income from Continuing Operations before taxes

5,138,750

Income Tax Expense (40%)

2,055,500

Income from Continuing Operations

3,083,250

Discontinued Operations

Loss from operations of discontinued component

(including gain on sale/disposal of $100,000)

(300,000)

Income Tax Benefit

120,000

(180,000)

Net Income .............................................

$2,903,250

Account balances:

Cash-7882000

Accounts Receivable-1400000

Inventory-2798000

Allowance for doubtful accounts-40000

Prepaid Supplies- 93000

Assets held for sale- 0

Land-17500000

Buildings-7975000

Equipment-9800000

Accumulated depreciation- equipment- 5130000

accumulated depreciation- buildings- 1395000

accounts payable- 1500000

interest payable- 101250

bonds payable- 5000000

Common stock ($10 par)- 12500000

Retained earnings-13837500

unearned design revenue- 4650000

sales commissions- 2000000

Cost of goods sold- 4962500

advertising expense- 750000

rent expense- 1150000

wages expense- 4000000

supplies expense- 700750

interest expense- 201250

loss on income from discontinued operations- 300000

prepaid rent- 300000

paid in capital in excess of par- 5000000

long term notes payable- 500000

investment in ABC bonds- 2000000

investments in XYZ bonds- 300000

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