Yvonne's Fashion Fair Trial Balance December 31, 2023

Account Title Debit Credit

Cash ............................................................... $172,000

Sales Revenue........................................................... $8,000,000

Receivables.............................................................. 435,000

Inventory................................................................ 500,000

Investments............................................................. 729,000

Land...................................................................... 638,000

Buildings............................................................. 1,040,000

Accumulated depreciation-building.............................. 200,000

Accumulated depreciation-furniture and equipment............ 80,000

Furniture and Equipment........................................... 600,000

Franchise............................................................. 260,000

Patent................................................................. 190,000

Payables............................................................ 2,077,000

Cost of goods sold................................................ 4,700,000

Selling Expense.................................................. 1,600,000

Administrative expense.......................................... 800,000

Interest expense................................................... 151,000

Reconstruction costs.............................................. 300,000

Research and development expense............................... 200,000

Gain on sale of equipment......................................... 60,000

Common Stock, $4 par............................................. 900,000

Dividend revenue................................................... 20,000

Retained earnings................................................... 178,000

Paid-in capital in excess of par................................. 800,000

$12,315,000 $12,315,000

Additional information

1. Receivables include:

$345,000 amount owed by customers for merchandise purchased on account.

(40,000) allowance for uncollectible accounts from customers

20,000 prepaid advertising

110,000 short-term loan due September 2024

$435,000total receivables

2. Investments include the following:

229,000 equity investment that the company will sell in March 2024

500,000 held-to-maturity bonds investment.

$729,000 total investments

3. Payables consist of:

$ 600,000 note due June 30, 2024

500,000 long-term loan payable

900,000 bonds payable maturing 12/31/2030

67,000 due to suppliers for merchandise and services on account

10,000received from a customer for merchandise to be provided in January 2024.

$2,077,000 Total payables

4. On December 30, the board of directors declared a cash dividend of $0.15 per share on its common stocks outstanding payable January 20, 2024. This transaction was not recorded in the company's accounts

5. Cash includes:

$ 7,000 cash in State Bank checking account

85,200 cash in a savings account at Regional Bank representing a compensating balance for a long-term loan from this bank 87,000 restricted cash in a savings account to pay bonds payable due 08/28/2035

800 currency and coins in the office (8,000) bank overdraft at Friendly Bank $172,000 total cash

6. One million shares of $4 par value common stock are authorized of which 225,000 shares were issued and outstanding.

7.On December 31, 2023 a customer paid $55,000 in advance for merchandise to be delivered February 20, 2024. The cost of the merchandise is $34,000. The company incorrectly recorded the amounts in sales revenue and cost of goods sold respectively. These amounts are considered significant.

8. On June 1, 2023 the company's purchased $52,000 furniture and equipment that was incorrectly recorded in selling expense. Furniture and equipment are depreciated over 10 years using the straight-line method of depreciation. Depreciation expense is considered administrative expense.

9. Assume a tax rate of 21%.

Required:

Use Microsoft Excel to prepare the following 2023 financial statements for Yvonne's Fashion Fair: a. Multiple-step income statement that includes earnings per share disclosure.

b. Statement of retained earnings

c. Classified balance sheet.