Preparation of Financial Statements

Barker Company has the following ledger accounts and adjusted balances as of December 31, 2016. All accounts have normal balances. Barkers income tax rate is 40%. Barker has 300,000 shares of Common Stock authorized. You will need to determine the number of shares issued and the number of shares outstanding for your balance sheet.

Accounts Payable. 24,000

Accounts Receivable 180,000

Accumulated Depreciation-Building 50,000

Administrative Expenses. 40,000

Allowance for Doubtful Accounts 22,000

Bonds Payable (Mature 2020). 300,000

Building 400,000

Cash. 26,000

Common Stock 325,000

Cost of Goods Sold. 380,000

Discount on Bonds Payable. 50,000

Dividends 20,000

Income from Operations of Division X.. 40,000 (Division X is a component of Barker Company)

Interest Revenue.. 10,000

Inventory.. 280,000

Land. 2 00,000

Loss from Fire...... 70,000

Loss from Sale of Division X........................... 80,000 (Division X is a component of Barker Company)

Paid-In Capital in Excess of Par 75,000

Patent 30,000

Prepaid Rent. 10,000*

Retained Earnings, January 1, 2016.250,000

Sales Revenue..900,000

Selling Expenses. 130,000

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

Common Stock par value is $5 per share.

Instructions: Use this information to prepare a multiple-step income statement and a classified balance sheet. This problem MUST be handwritten in your handwriting to receive credit. It may be turned in on either the last day of class or the day of the final exam. It will not be accepted on any other day.