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Question 1 Problem 1 & 2: Income Statement and Statement of Retained Earnings The following account balances were taken from the trial balance of The
Question 1
Problem 1 & 2: Income Statement and Statement of Retained Earnings
The following account balances were taken from the trial balance of The Rookery, Inc. on December 31, 2021. The Retained Earning account had a balance of $468,000 on January 1, 2021. There are 150,000 shares of common stock outstanding.
Prepare income statement (multi-step) and a retained earnings statement for the year ended December 31, 2021.
Sales revenue | 2,100,500 | Telephone and internet expense (admin) | 4,900 | |
Sales discounts | 12,680 | Depreciation expense (office furn & equip) | 8,680 | |
Cost of goods sold | 1,490,300 | Property tax expense | 12,900 | |
Salaries and wages expense (sales) | 54,600 | Bad debt expense (selling) | 8,630 | |
Sales commissions | 135,800 | Maintenance & repairs expense (admin) | 4,860 | |
Travel expense (salespersons) | 41,600 | Office expense | 7,500 | |
Freight-out | 31,800 | Sales returns and allowances | 36,870 | |
Entertainment expense | 21,930 | Dividends received | 21,000 | |
Telephone and internet expense (sales) | 11,300 | Interest expense | 37,500 | |
Depreciation expense (sales equipment) | 3,500 | Income tax expense | 68,000 | |
Maintenance and repairs expense (sales) | 2,900 | Depreciation overstatement due to error (2020, net of tax) | 31,000 | |
Miscellaneous expenses (sales) | 6,570 | Dividends declared on preferred stock | 15,000 | |
Office supplies used | 2,900 | Dividends declared on common stock | 45,000 |
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