Financial Statement Problem $-$ Summer $12024$

Liu Company has the following ledger accounts and adjusted balances as of December $31,2023.$ All accounts have normal balances. Liu's income tax rate is $20\%.$ Liu has $500,000$ shares of Common Stock authorized, $100,000$ shares of Common Stock issued, and $95,000$ shares of Common Stock outstanding.

Accounts Payable. $q,$

Accounts Receivable. $29,250$

$202,500$

Accumulated Depreciation$-$Equipment........... $45,000$

Administrative Expenses.............................. $60,000$

Allowance for Doubtful Accounts................. $22,500$

Bonds Payable.............................................. $200,000$

Building........................................................ $562,500$

Cash............................................................. $29,250$

Common Stock...................................................... $3000$

Cost of Goods Sold....................................... $427,500$

Discount on Bonds Payable...................... $5,000$

Dividends.............................................. $15,000$

Equipment. $...........................................217,500$

Income from Operations of Division X$......45,000$

$($Division $x$ is a component of Liu Compary$)$

Interest Revenue........................................ $3000$

Inventory $.............................................315,000$

Land $($held for future use$).................225,000$

Land $($used for building$)...................123,750$

Loss from Sale of Division X$............$ Sacoe

$($Division $x$ is a component of Lie Company$)$

Loss on Sale of Invesitmens. $..........11,250$

Mortgage Payable $............$m$.$momos$\mathrm{.}281,256*$

Paid$-$In Capital in Lacese of Par $,190$ ake

Prepaid Rent. $q,$ Retained Iamings, January $1,2028,201,250$

Sales Returns and Allowanees.......... $37,520$

Sales Revenue $..................$o$.$ o$.1,151,250$

Selling Lxpenses. $...........131\mathrm{.}250$

Trademark $....................................38,750$

Treasury Stock................................. $30,00$

$**$$$40,000$ of the principal comes due in $2023.$

$*$Two years rent on offsite document starage paid in advance.

$q,$

Instructions:

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

The answer must be handwritten. Use a separate page for each statement.

Put your name on EACH page of your answer.

Solution MUST be uploaded to Canvas. It will not be accepted if emailed to penced a uhdedu.