Question 5 Bramble Corp.'s balance sheet at December 31, 2016, is presented below BRAMBLE CORP Balance Sheet December 31, 2016 Cash Inventory Prepaid insurance Equipment $31,800 Accounts payable 30,200 Interest payable 5,500 Bonds payable 39,800 Common stock $13,700 2,490 49,800 27,900 Retained earnings $13,410 $107,300 $107,300 During 2017, the following transactions occurred. Bramble uses a perpetual inventory system 1. Bramble paid $2,490 interest on the bonds on January 1, 2017. 2. Bramble purchased $241,600 of inventory on account 3. Bramble sold for $488,000 cash inventory which cost $263,000. Bramble also collected $29,280 sales taxes 4. Bramble paid $240,000 on accounts payable. 5. Bramble paid $2,490 interest on the bonds on July 1, 2017 6. The prepaid insurance ($5,500) expired on July 31. 7. On August 1, Bramble paid $10,440 for insurance coverage from August 1, 2017, through July 31, 2018 8. Bramble paid $17,000 sales taxes to the state 9. Paid other operating expenses, $89,000 10. 11. Redeemed the bonds on December 31, 2017, by paying $48,100 plus $2,490 interest. Issued $85,000 of 8% bonds on December 31, 2017, at 103. The bonds pay interest every June 30 and December 31. Adjustment data: 12. 13. 14. Recorded the insurance expired from item 7. The equipment was acquired on December 31, 2016, and will be depreciated on a straight-line basis over 5 years with a $2,900 salvage value The income tax rate is 30%. (Hint: Prepare the income statement up to income before taxes and multiply by 30% to compute the amount.) No. Account Titles and Explanation Debit Credit 1. 2. 3. (To record sales revenue.) To record cost of goods sold.) 4. 5. 7. 8. 9. 10. (To record interest expense.) (To record retirement of bonds.) 12. 13. 14. BRAMBLE CORP Trial Balance Debit Credit Prepare an income statement for the year ending December 31, 2017. BRAMBLE CORP Income Statement Prepare a retained earnings statement for the year ending December 31, 2017. BRAMBLE CORP Retained Earnings Statement Prepare a classified balance sheet as of December 31, 2017. (List current assets in order of liquidity. BRAMBLE CORP Balance Sheet Assets Liabilities and Stockholders' Equity