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Happy Reindeer is a clothing store that has asked you to prepare their financial statements at December 31, 2021. In the following table are
Happy Reindeer is a clothing store that has asked you to prepare their financial statements at December 31, 2021. In the following table are the correct adjusted account balance, in alphabetical order, as of that date. Each balance is the "normal" balance for that account. (Normal meaning the same as the debit or credit side that increase the account.) Accounts payable 12,750 Accounts receivable 2,600 Accumulated depreciation: office equipment 12,000 Additional paid-in capital (common stock) 13,000 Bonds payable (due December 31, 2024) Cash 22,500 19,200 Common stock (1,800 shares, $10 par value) 18,000 Cost of goods sold 100,575 Deferred income taxes 5,750 Depreciation expense: office equipment 2,750 Dividends declared 5,000 Income tax expense 8,190 Insurance expense 900 Land 39,500 Merchandise inventory 17,500 Notes payable (due December 31, 2022) 2,500 Office equipment 41,000 Office supplies 900 Office supplies expense 520 Preferred stock (250 shares, $20 par value) 5,000 Prepaid rent 1,800 Rent expense 6,100 Retained earnings (January 2021) 20,550 Salaries Expense 88,095 Sales 226,000 Sales Returns and Allowances 2,500 Sales taxes payable 3,200 Utilities expense 4,120 1. Prepare an income statement for the year ended December 31, 2021, which includes amounts for gross profit, income before income taxes and net income. List expenses (other than cost of goods sold and income tax expense) in order, from the largest to the smallest dollar balance. 2. Prepare a statement of retained earnings for the year ended December 31, 2021. 3. Prepare a balance sheet as of December 31, 2021, following these guidelines: a. Include separate asset and liability categories for those items that are "current" b. Include and label amounts for total assets, total liabilities, total stockholders' equity and total liabilities and stockholders' equity. c. Present deferred income taxes as a noncurrent liability.
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