Thomas Real Estate Company (organized as a corporation on April 1, 2003) has completed the ac-

L03 counting cycle for the second year, ended March 3 1 , 2005. Thomas also has completed a correct trial balance as follows:

Required: 1. Complete the financial statements, as follows:

a. Income statement for the reporting year ended March 31, 2005. Include income tax expense, assuming a 30 percent tax rate. Use the following major captions: Revenues. Expenses, Pretax Income, Income Tax, Net Income, and EPS (list each item under these captions).

b. Balance sheet at the end of the reporting year, March 31, 2005. Include (1) income taxes for the current year in Income Taxes Payable and (2) dividends in Retained Earnings. Use the following captions (list each item under these captions). 2. Give the journal entry to record income taxes for the year (not yet paid).

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THOMAS REAL ESTATE COMPANY Trial Balance At March 31, 2005 Account Titles Debit Credit Cashi 53,000 Accounts receivable 44,800 Office supplies inventory 300 Automobiles (company cars) 30,000 Accumulated depreciation. automobiles 10.000 Office equipment 3,000 Accumulated depreciation, office equipment Accounts payable 1,000 20.250 Income taxes payable 0 Salaries and commissions payable 1.500 Note payable, long term 30.000 Capital stock (par $1; 30,000 shares) Contributed capital in excess of par Retained earnings (on April 1, 2004) 30,000 5,000 7,350 Dividends declared and paid during the current year 8,000 Sales commissions earned 77.000 Management fees earned 13,000 Operating expenses (detail omitted to conserve your time) 48,000 Depreciation expense (on autos and including $500 on office equipment) 5.500 Interest expense 2.500 Income tax expense (not yet computed) Totals 195.100 195,100