This third project requires you to invent a merchandising company and create its financial statements for the year ended 12/31/2020, its first year of operations.

Instructions:

1.Create the company's multi-step income statement for the year ended 12/31/20.

2.Create the retained earnings statement for the year ended 12/31/20.

3.Create the classified balance sheet dated 12/31/20.

Hints and reminders:

Be sure to include Sales Revenue (labeled as "Net Sales" on the income statement) and any specific Expenses your business has.

Be sure to include Inventory as a current asset on the balance sheet and CGS on the income statement since this is a merchandising company.

Be sure to calculate Gross Profit.

Be sure to include a line for Operating Income.

Be sure to include an "Other Revenue or Expense" (Interest expense or Interest revenue).

Be sure to include Accumulated Depreciation and Depreciation Expense.

Be sure you have an amount in the Common Stock account.

Remember, this is your first year of operations, so Retained Earnings has a beginning balance of zero. Be sure to include an amount for Dividends.

You will be 'making up' amounts.Your business can be as successful as you like.

Make sure the statements 'flow' with each other.