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East Company has the following ledger accounts and adjusted balances as of December 31, 2020. All accounts have normal balances. Easts income tax rate is

East Company has the following ledger accounts and adjusted balances as of December 31, 2020. All accounts have normal balances. Easts income tax rate is 20%. East has 300,000 shares of $10 par Common Stock authorized and 85,000 shares of Common Stock outstanding.

Accounts Payable. 87,750

Accounts Receivable 707,100

Accumulated Depreciation-Building 168,750

Accumulated Depreciation-Equipment. 140,000

Administrative Expenses. 150,000

Allowance for Doubtful Accounts 67,500

Bonds Payable.. 600,000

Building..1,687,500

Cash. 97,750

Common Stock... 900,000

Cost of Goods Sold.1,282,500

Dividends 75,000

Equipment 652,500

Income from Operations of Division Y.. 135,000

(Division Y is a component of East Company)

Interest Revenue.. 90,000

Inventory...945,000

Land (held for future use).... 675,000

Land (used for building).. 371,250

Loss from Sale of Division Y.. 270,000

(Division Y is a component of East Company)

Loss on Sale of Land.... 33,750

Mortgage Payable ... 813,550*

Paid-In Capital in Excess of Par.. 594,000

Premium on Bonds Payable... 15,000

Prepaid Insurance. 33,750**

Retained Earnings, January 1, 2019 843,750

Sales Discounts. 43,500

Sales Returns and Allowances.112,500

Sales Revenue...3,453,750

Selling Expenses. 416,750

Trademark101,250

Treasury Stock. 90,000

*$50,000 of the principal comes due in 2019.

**Two years insurance paid in advance.

Instructions:

Use this information to prepare a multiple-step income statement, a retained earnings statement, and a classified balance sheet.

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