Zurich Limited is a private corporation reporting under ASPE. At December 31, 2014, its general ledger contained

Question:

Zurich Limited is a private reporting under ASPE. At December 31, 2014, its general ledger contained the following summary data:
Cost of goods sold......................$1,225,000
Interest expense..............................35,000
Interest revenue..............................12,500
Operating expenses.........................210,000
Retained earnings, January 1..............550,000
Sales........................................1,650,000
Additional information:
1. In 2014, common share dividends of $25,000 were declared on June 30 and December 31. The dividends were paid on July 8, 2014, and January 8, 2015, respectively.
2. The company's income tax rate is 20%.
Instructions
(a) Record the transactions in 2014.
(b) Determine income tax expense and prepare a multiple-step income statement for 2014.
(c) Prepare a statement of retained earnings for 2014.
Taking It Further
Compare a statement of retained earnings with a statement of owner's equity.
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