Financial Statement Project (Fall 2022)

Langley Company has the following ledger accounts and adjusted balances as of December 31, 2022. All accounts have normal balances. Langleys income tax rate is 20%. Langley has 500,000 shares of $10 par Common Stock authorized.

Accounts Payable. 78,000

Accounts Receivable 340,000

Accumulated Depreciation-Building 150,000

Accumulated Depreciation-Equipment. 120,000

Administrative Expenses. 120,000

Allowance for Doubtful Accounts 60,000

Bonds Payable.. 500,000

Building..1,500,000

Cash. 278,000

Common Stock 800,000

Cost of Goods Sold.1,140,000

Dividends 40,000

Equipment 580,000

Income from Operations of Division X.. 120,000

(Division X is a component of Langley Company)

Interest Revenue.. 80,000

Inventory...840,000

Land (held for future use).... 600,000

Land (used for building).. 330,000

Loss from Sale of Division X...........................240,000

(Division X is a component of Langley Company)

Loss on Sale of Investments... .. 30,000

Mortgage Payable ... 750,000*

Paid-In Capital in Excess of Par...448,000

Premium on Bonds Payable.. 20,000

Prepaid Insurance. 30,000**

Retained Earnings, January 1, 2022 750,000

Sales Discounts. 60,000

Sales Returns and Allowances.100,000

Sales Revenue...3,070,000

Selling Expenses. 390,000

Trademark 90,000

*$50,000 of the principal comes due in 2023.

**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.