Question
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.)
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