Question
The Companys policy on Income Tax Expense is to pay the full amount when due on March 15 of the following year. Since it was
The Companys policy on Income Tax Expense is to pay the full amount when due on March 15 of the following year. Since it was not been paid in the year incurred, it is classified on the Balance Sheet an Income Tax Payable. Round to the nearest dollar. The year-end market price per share of common stock is $38 for the current year. *Depreciation on Equipment, Rent, Insurance, and Utility Expense are allocated 80% to Selling and 20% to General and Administrative. The companys policy is to use four classifications of expenses on the Income Statement Cost of Goods Sold, Selling, General and Administrative, and Income Tax. General and Administrative catch all costs that do not clearly fit in the other classifications Requirements: Create a formal classified Income Statement for the current year (include earnings per share) Create a formal Statement of Retained Earnings for the current year. Create a formal classified Balance Sheet for the current year Create the above three statements for the prior year. Create a formal Statement of Cash Flows (Indirect Method) The preferred stock was issued to retire $5,500,000 of bonds. This was considered a non-cash financing activity. There were no other non-cash financing or investing activities In the current year the Company purchased Regor Stock, land for future use, building improvements, and office equipment. In the current year, the Company paid dividends, the current portion of the mortgage, and purchased treasury stock.
The following information relating to Mesa Rock, Inc. was taken from the adjusted trial balances of the ear just ended and the prior year current year prior year Accounts 500,000 E2.500.000 Accounts Payable 1753,000 11940,000 ccounts Receivable Accumulated Depreciation-Building 4,000,000 3,000,000 Accumulated Depreciation Equipmen 1150,000 900,000 Administrative Salary Expense 4700.000 374.000 Administrative Supply Expens 499.000 450.000 Advertising Expense 2.212.000 2.331.000 Allowance for UnCollectible ACCounts 53,000 40,000 Amortization Expense 00,000 Franchise & $300,000 Patents 500,000 500,000 42.000 47.000 Uncollectible Account Expense Bonds payable 14,000,000 19,500,000 Building 29,000,00 25.987.000 Cash 2750,000 0,204 000 2,000.00 Shares Issued our 3,036,000 3,000,000 elivery Expense (to customers Depreciation Expense-Building 000,00 1.000.000 Depreciation Expense Equipment 250,000 250,00 8,050,00 6,000.000 Dividends Declared ($400,000 to P/S & remainder to C/S Dvidends payable 1,000,000 15,000,000 14.964,000 Equipmen Freight-n B 12,000 go6,000 3 100,000 3,300,000 Franchise, net 30% 30% Income Tax Expense (see note 1 Insurance Expense 200,000 200,000 Interest Expense 1/48.000 LO00,000 5150,000 4,400,000 Inventory, beginning Inventory, ending 4, 200,000 5,150,000 Investment in Regor Inc. Common Stock Controlling interest 5,000,00 0 Land Currenty in use 1.300,000 1,300,000 Land held for uture use 500,000 Mortgage Payable ,000,000 of it is current 12400,000 14,400,000 Rad in Captain Excess C Par Value, Common Stock T00.000 T00,000 500,000 0 Paid in Capital in Excess of Par Value, Preferred Stock Patents, net 5,000,00 500,000 issued and outstanding 573,000 SK.000 Premium on Bonds Payable Prepaid Expenses 750,000 00,000 urchases 50, 000 57, 36.000 Purchase Discounts 112.000 618.000 Rent Expense 1.000.000 1,000,000 Retained Earnings, Beginning Balance 6,007,000 1.997.000 Sales Revenue 95.587,000 92,902,00 Sales Discounts 140,000 188,000 312,000 303,000 Sales Returns and Allowances Sales Salary Expense Sales Supply Expense 12,000 688,000 500,00 490,000 Supply Inventory 750,000 Treasury Stock, (35,000 Shares) unearned Revenues 500,000 525,00 Utility Expense 3,200,000 2,090,000Step by Step Solution
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