AP-21B

Bugle News

AP-21B LOS Bugle News operates by selling newspaper and magazines to consumers. Peter has prepared the income statement and balance sheet for Bugle News as shown below. The note payable is due in annual payments of $50,000. $1,000,000 Bugle News Income Statement For the Year Ended December 31, 2018 Revenues Sales Revenue $975,000 Interest Revenue 25,000 Total Revenues Expenses Cost of Goods Sold 150,000 Advertising Expense 50,200 Rent Expense-Newsstand 50,000 Rent Expense-Office Space 5,800 Office Salaries Expense 125,000 Sales Salaries Expense 160,000 Loss on Property Damage 59,000 Total Expenses Net Income 600,000 $400,000 Inventory: Merchandising Transactions Chapter 7 Bugle News Balance Sheet As at December 31, 2018 Assets Cash Accounts Receivable Prepaid Insurance Merchandise Inventory Equipment Accumulated Depreciation Total Assets $121,000 5,000 514,000 310,000 800,000 (250,000) $1.500.000 Liabilities Accounts Payable Unearned Revenue Notes Payable Total Liabilities $15,000 530,000 300,000 5845,000 Owner's Equity Parker, Capital Total Owner's Equity Total Liabilities and Owner's Equity 655,000 655,000 $1.500.000 Required a) Prepare the multiple-step income statement for Bugle News sactions b) Prepare the classified balance sheet for Bugle News Chapter Analysis Calculate and interpret the current ratio for Bugle News