Income Statement, Statement of Owner's Equity, and Balance Sheet Paulson's Pet Store completed the Adjusted Trial Balance for the year ended December 31, 20--. Owner's equity as of January 1, 20--, was $504,320. The current portion of Note Payable is $2,000. Paulson's Pet Store End-of-Period Spreadsheet (Partial) December 31, 20-- ADJUSTED TRIAL BALANCE ACCOUNT TITLE DEBIT CREDIT Cash 23,440.00 Accounts Receivable 9,360.00 Merchandise Inventory 64,800.00 Estimated Returns Inventory 1,200.00 2,400.00 Supplies Prepaid Insurance 1,800.00 Land 90,000.00 350,000.00 Building Accum. Depr.Building 20,000.00 Store Equipment 120,000.00 Accum. Depr.Store Equipment 3,600.00 Accounts Payable 9,560.00 1,600.00 Customer Refunds Payable 1,200.00 Wages Payable Sales Tax Payable Note Payable 3,440.00 16,000.00 534,320.00 B. Paulson, Capital B. Paulson, Drawing Income Summary 4,800.00 59,200.00 64,800.00 800.00 1,200.00 326,040.00 5,360.00 162,640.00 4,080.00 3,200.00 1,600.00 Sales Sales Returns and Allowances Purchases Purchases Returns and Allowances Purchases Discounts Freight-In Wages Expense Advertising Expense Supplies Expense Phone Expense Utilities Expense Insurance Expense Depr. Expense-Building Depr. Expense-Equipment Miscellaneous Expense Interest Expense 69,400.00 1,200.00 800.00 2,736.00 2,864.00 1,600.00 10,000.00 1,800.00 600.00 640.00 989,040.00 989,040.00 399,320.00 321,240.00 78,080.00 Net Income Required: 326,040 5,360 320,680 1. Prepare a multiple-step income statement. Paulson's Pet Store Income Statement For Year Ended December 31, 20-- Revenue from sales: Sales Less: Sales returns and allowances Net sales Cost of goods sold: Merchandise inventory, January 1, 20- Estimated returns inventory, January 1, 20-- Purchases 162,640 Less: Purchases returns and allowances 4,080 Less: Purchases discounts 3,200 7,280 Net purchases Add freight-in 1,600 Cost of goods purchased Goods available for sale Less: Merchandise inventory, December 31, 20-V 64,800 Less: Estimated returns inventory, December 31, 20-V 1,200 Cost of goods sold Gross profit a 534,320.00 B. Paulson, Capital B. Paulson, Drawing Income Summary 4,800.00 59,200.00 64,800.00 800.00 1,200.00 326,040.00 5,360.00 162,640.00 4,080.00 3,200.00 1,600.00 Sales Sales Returns and Allowances Purchases Purchases Returns and Allowances Purchases Discounts Freight-In Wages Expense Advertising Expense Supplies Expense Phone Expense Utilities Expense Insurance Expense Depr. Expense-Building Depr. Expense-Equipment Miscellaneous Expense Interest Expense 69,400.00 1,200.00 800.00 2,736.00 2,864.00 1,600.00 10,000.00 1,800.00 600.00 640.00 989,040.00 989,040.00 399,320.00 321,240.00 78,080.00 Net Income 2. Prepare a statement of owner's equity. Paulson's Pet Store Statement of Owner's Equity For Year Ended December 31, 20-- B. Paulson, capital, January 1, 20- Add additional investments 504,320 Total investment Net income for the year Less: Withdrawals for the year 4,800 Increase in capital B. Paulson, capital, December 31, 20-- 3. Prepare a balance sheet. Paulson's Pet Store Balance Sheet December 31, 20-- Assets 23,440 9,360 Current assets: Cash Accounts receivable Merchandise inventory Estimated returns inventory Supplies 64,800 1,200 2,400 Prepaid insurance 1,800 103,000 90,000 Total current assets Property, plant, and equipment: Land Building Less: Accumulated depreciation Equipment Less: Accumulated depreciation 350,000 20,000 330,000 120,000 3,600 116,400 536,400 Total assets 639,400 Liabilities 2,000 9,560 Current liabilities: Note payable Accounts payable Customer refunds payable Wages payable Sales tax payable 1,600 1,200 3,440 17,800 Total current liabilities Long-term liabilities: Note payable Less: Current portion 16,000 2,000 14,000 Total liabilities 31,800 Owner's Equity. B. Paulson, capital Total liabilities and owner's equity