Question
Elements from the adjusted trial balance for Maggie Co., a retailer, for the fiscal year end (12/31) 2015 are: Accounts Receivable$555,000 Accumulated Depr.-equipment450,000 Accumulated Depr.-buildings360,000
Elements from the adjusted trial balance for Maggie Co., a retailer, for the fiscal year end (12/31) 2015 are:
Accounts Receivable$555,000
Accumulated Depr.-equipment450,000
Accumulated Depr.-buildings360,000
Allowance for doubtful accts.36,000
Common Stock2,000,000
Depreciation Expense (equipment)50,000
Depreciation Expense (buildings)60,000
Dividends (common stock)120,000
Dividends Payable30,000
Insurance Expense35,000
Interest Expense40,000
Interest Payable20,000
Notes Payable (1/1/25)1,000,000
Prepaid Insurance95,000
Purchases975,000
Rent Receivable15,000
Rent Revenue90,000
Retained Earnings (1/1/15)818,000
Salaries Expense775,000
Salaries Payable25,000
Sales Returns13,000
Sales Revenue2,975,000
Additional information, not contained in the above, is as follows:
a.Bad Debt expense of $12,000 for 2015 has not yet been recorded.
b.An internal audit discovered that amortization expense of intangible assets for 2013, 2014 and 2015 was not recorded by the amount of $41,000 per year (no closing entries for 2015 have been made).
c.The company sold its only investment in held-to-maturity securities during the current year at a gain of $145,000.This gain is considered unusual in nature and infrequent in occurrence.
d.At the beginning of 2015, Maggie sold equipment for $50,000.The machine originally cost $76,000 and had accumulated depreciation of $32,000.
e.The company totally discontinued its mining operations during the year.The loss on operations of the discontinued subsidiary was $80,000 before taxes while there was a gain on disposal of mining assets of$120,000 before taxes.
f.Maggie uses a periodic inventory system and Inventory (1/1/15) is $175,000 and Inventory (12/31/15) is $225,000.
g.Unrealized (holding) gain on available-for-sale securities, net of tax, for 2015 is $32,000.
Required:Prepare in good form an income statement/statement of comprehensive income (multiple step) and a statement of retained earnings for the year ended 2015. Assume a 30% tax rate unless indicated otherwise.Maggie has 500,000 shares of common stock outstanding on December 31, 2015.
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