Follow the template.
FINANCIAL STATEMENT PROJECT #3 Balance: 12,000 15,000 4.600 2,450 650 22,510 900 68,900 2,820 7,240 12,200 1,150 Below is the trial balance of Louie Company on December 31, 2020. The accounts are listed in alphabetical order and all accounts have normal balances. Account Title: Balance: Account Title: Accounts Payable 6,400 Land Accounts Receivable 8,200 Accum. Depr. - Bldngs. Long-Term Notes Payable 48,000 Merchandise Inventory Accum. Depr. - Equip. 31,200 Miscellaneous Revenues Buildings 72,000 Prepaid Insurance Cash 10,100 Retained Earnings Common Stock 25,000 Salaries Payable Cost of Goods Sold 24,700 Sales Dividends Declared 8,000 Sales Discounts Equipment 44,500 Sales Returns & Allowances General & Admin. Expense 11,300 Selling Expenses Interest Expense 1,200 Supplies Interest Payable 300 REQUIRED: Prepare the financial statements for the year for Louie Company--a multi-step income statement a statement of retained earnings and a classified balance sheet. What is different for this project compared to Project #2? 1. New Accounts: Sales Revenue Sales Returns and Allowances and Sales Discounts--these are contra accounts To the Sales Revenue account. Cost of Goods Sold Expense Note that all of our operating expense accounts like depreciation, utilities, salaries, rent, insurance, supplies, etc. have been summarized into just two account--Selling and General & Administrative. Merchandise Inventory 2. Multi-Step Income Statement: The multi-step income statement distinguishes between the income from the primary business purposes (we assume that the only primary business purpose is merchandising) and the net income from secondary business purposes. The mult-step income statement shows the computation of the gross profit. The multi-step income statement segregates all of the operating expense accounts into two categories: selling and administrative (note, as mentioned above, all of the operating expenses have been consolidated into two accounts). Mars Company Multi-Step Income Statement For the Year Ending on December 31, 2019 Sales Less: Sales Returns & Allowances Sales Discounts Net Sales Cost of Goods Sold Expense Gross Profit Operating Expenses: Selling Expenses Administrative Expenses Total Operating Expenses Operating Income Other Revenues: Miscellaneous Revenues Other Expenses: Interest Expense Net Income Mars Company Statement of Retained Earnings For the Year Ending on December 31, 2019 Beginning Retained Earnings Plus: Net Income Less: Dividends Declared Ending Retained Earnings Mars Company Classified Balance Sheet As of December 31, 2019 ASSETS Current Assets: Cash Accounts Receivable Supplies Prepaid Insurance Merchandise Inventory Total Current Assets LIABILITIES Current Liabilities: Accounts Payable Salaries Payable Interest Payable Total Current Liabilities Long-Term Liabilities: Notes Payable Total Liabilities Plant Assets: Equipment Less: Ace Dep Buildings Less: Acc Dep Land Total Plant Assets Total Assets STOCKHOLDERS' EQUITY Paid-in Capital: Common Stock Total Paid-In Capital 34,200 Retained Earnings 60,830 Total Stockholders' Equity Total Liabilities & Stockholders' Equity
