Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Required information Mountain Sports, Inc., is a retailer that has engaged you to assist in the preparation of its financial statements at December 31, 2018.

Required information

Mountain Sports, Inc., is a retailer that has engaged you to assist in the preparation of its financial statements at December 31, 2018. Following are the correct adjusted account balances, in alphabetical order, as of that date. Each balance is the normal balance for that account. (Hint: The normal balance is the same as the debit or credit side that increases the account.)

Accounts payable $ 12,850
Accounts receivable 3,600
Accumulated depreciation: office equipment 12,200
Additional paid-in capital (common stock) 7,800
Bonds payable (due December 31, 2021) 23,200
Cash 14,200
Common stock (2,600 shares, $10 par value) 26,000
Cost of goods sold 108,920
Deferred income taxes 6,050
Depreciation expense: office equipment 2,700
Dividends declared 4,900
Income tax expense 7,840
Insurance expense 860
Land 39,400
Merchandise inventory 20,100
Notes payable (due December 31, 2019) 3,400
Office equipment 42,000
Office supplies 830
Office supplies expense 510
Preferred stock (270 shares, $20 par value) 5,400
Premium on bonds payable 2,150
Prepaid rent 1,320
Rent expense 5,800
Retained earnings (January 2018) 21,950
Salaries expense 87,945
Sales 226,100
Sales returns and allowances 1,900
Sales taxes payable 3,200
Treasury stock (300 common shares at cost) 3,375
Utilities expense 4,100

a. Prepare an income statement for the year ended December 31, 2018.

b. Prepare a statement of retained earnings for the year ending December 31, 2018.

c. Prepare a statement of financial position as of December 31, 2018. (Amounts to be deducted should be indicated by minus sign.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Behind Closed Doors What Company Audit Is Really About

Authors: V. Beattie, R. Brandt, S. Fearnley

2001 Edition

0333747844, 978-0333747841

More Books

Students also viewed these Accounting questions

Question

a neglect of quality in relationship to international competitors;

Answered: 1 week ago