Larson Company has the following ledger accounts and adjusted balances as of December 31, 2017. All accounts have normal balances. Larsons income tax rate is 40%.

Accounts Payable. 18,750

Accounts Receivable 135,000

Accumulated Depreciation-Building 37,500

Administrative Expenses. 40,500

Allowance for Doubtful Accounts.. 15,000

Bonds Payable (Mature 2020). 187,500

Building 277,500

Cash. 18,750

Common Stock 200,000

Cost of Goods Sold. 300,000

Dividends 12,000

Gain on Sale of Land..14,000

Interest Revenue.. 15,000

Inventory.. 210,000

Land. 172,500

Loss from Operations of Division X 35,000

(Division X is a component of Larson Company)

Loss from Sale of Division X........................... 33,000

(Division X is a component of Larson Company)

Patent 22,500

Paid-In Capital in Excess of Par . 100,000

Prepaid Rent. 7,500*

Retained Earnings, January 1, 2015 164,700

Sales Returns and Allowances 7,000

Sales Revenue. 682,000

Selling Expenses. 75,000

*Two years rent paid in advance for offsite document storage.

Larson has 200,000 shares of $5 par common stock authorized and has no treasury stock.

Instructions:

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