The balance in the Retained Earnings account reflects the account balance before temporary accounts are closed. In addition, the Notes Payable balance includes notes payable of $22,375 due within the next year and $89,490 of notes payable that are not due for several years. Use the information given to create Coldwater Co.s annual financial statements. Construct Coldwaters multiple-step income statement for 20Y8.
ens payable Dividends Coldwater Co. has compiled the following account balances from its general ledger on June 30, 20Y8 (the last day of its fiscal year). + Trial Balance Account Amount Cash cas $62,460 Accounts receivable 150,120 Inventory 195,870 195,07 Prepaid insurance 25.030 Equipment Equipment 493,380 Accumulated depreciation 84,680 www. 63,865 Notes payable 111,865 1,005 Common stock 200,000 ce 52,870 278,420 Sales Sales 3,384,420 Rent revenue (Nonoperating) 19,930 Cost of goods sold 2,390,295 Interest expense 15,410 (Nonoperating) Selling/general/administrative 550,610 expense Research and development expense 168,080 Depreciation expense 39,055 Retained earnings The balance in the Retained Earnings account reflects the account balance before temporary accounts are closed. In addition, the Notes Payable balance includes notes payable of $22,375 due within the next year and $89,490 of notes payable that are not due for several years. Use the information given to create Coldwater Co.'s annual financial statements. Construct Coldwater's multiple-step income statement for 20Y8. 3,384,42 2,390,29 994,125 Coldwater Co. Income Statement (Multiple-step) For the Year Ending June 30, 20Y8 Sales Cost of goods sold Gross profit Operating expenses Selling/general/administrative expense $ 550,614 Research and development expense 168.08 Depreciation expense 39,055 Total operating expenses Operating income Other revenues and expenses Rent revenue (nonoperating) 19,930 Interest expense (nonoperating) 15,410 757,745 236,380 4,520 Total other revenues and expenses Net income 240,900 Feedback Check My Work Click on the sample multiple-step income statement above to review its structure. Then select the accounts from the trial balance that best fit each section. APPLY THE CONCEPTS: Construct the statement of retained earnings The statement of retained earnings shows the change in retained earnings as a result of net income and any dividends declared. It also serves as an important link between the income statement and the balance sheet in that it translates the effects of net income into an updated number for retained earnings. Construct Coldwater's retained earnings statement for 20Y8. Coldwater Co. Retained Earnings Statement For the Year Ending June 30, 20Y8 Retained earnings, July 1, 2017 Add: Net Income $240,9 Less: Dividends Increase in retained earnings Retained earnings, June 30, 20Y8 X X X APPLY THE CONCEPTS: Construct the balance sheet The balance sheet, also known as the statement of financial position, shows the company's assets and the claims against those assets in the form of liabilities and stockholders' equity. Unlike financial statements that display financial performance over a given interval of time, the balance sheet is a snapshot of a financial position at a given point in time. Construct Coldwater's balance sheet in account form for 20Y8. Coldwater Co. Balance Sheet June 30, 2018 Assets Current assets Cash 62,46 Accounts receivable 1501 Inventory 195,8 Prepaid insurance 25,03 Total current assets $433.4 Property, plant, and equipment Equipment 493,3 Less accumulated depreciation 84,68 Total property, plant, and equipment 408.7 Total assets $ 842,1 Liabilities Current liabilities Accounts payable 63,86 Notes payable (current portion) Total current liabilities Long-term liabilities Notes payable (long-term portion) x 200,0 Total liabilities Stockholders' Equity Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity X $842,1
