Answer:
Operating Income = $53,000
Net Income = $39,000
Ending balance of common stock = $300,000
Ending balance of retained earnings = $95,000
Ending total stockholders' equity = $395,000
Total current assets = $198,000
Net long-term assets = $265,000
Total long-term assets = $285,000
Total assets = $463,000
Total liabilities = 68,000
Explanation:
a. Multi-step Income Statement
Multi-step Income Statement put each revenues and expenditures items into different categories to show gross profit and net income. This can be prepared as follows:
Multi-step Income Statement
For the year ended
<u>Details $ </u>
Sales Revenue 545,000
Sales Discount <u> (45,000) </u>
Net Sales Revenue 500,000
Cost of Goods Sold <u> (400,000) </u>
Gross profit 100,000
Operating expenses:
Rent Expense (12,000)
Depreciation Expense (10,000)
Salaries Expenses <u> (25,000) </u>
Operating Income 53,000
Non-operating expenses:
Interest Expense <u> (6,000) </u>
Income before tax 47,000
Income Tax Expense <u> (8,000) </u>
Net income 39,000
Dividend paid <u> (4,000) </u>
Retained earning for the year <u> 35,000 </u>
b. Changes in Retained Earnings
<u>Details $ </u>
Beginning retained earnings 60,000
Retained earning for the year <u> 35,000 </u>
Ending retained earnings <u> 95,000 </u>
c. Movement in Common Stock
<u>Details $ </u>
Beginning balance of common stock 250,000
Additional shares issued <u> 50,000 </u>
Ending balance of common stock <u> 300,000 </u>
c. Statement of stockholders' equity
<u>Details $ </u>
Beginning balance of common stock 250,000
Additional shares issued <u> 50,000 </u>
Ending balance of common stock 300,000
Ending retained earnings <u> 95,000 </u>
Ending total stockholders' equity <u> 395,000 </u>
d. Classified Balance Sheet
Classified balance sheet shows each of the componets of assets, liabilities and equity. This can be prepared as follows:
Classified Balance Sheet
As at the year ended
<u>Details $ $ </u>
<u>Long-Term Assets</u>
Buildings 65,000
Equipment <u> 220,000 </u>
Total Long-Term Assets 285,000
Accumulated Depreciation <u> 20,000 </u>
Net Long-Term Assets 265,000
<u>Current Assets</u>
Cash 12,000
Accounts Receivable 150,000
Supplies <u> 36,000 </u>
Total Current Assets <u> 198,000 </u>
Total Assets <u> 463,000 </u>
<u>Financed by:</u>
Ending total stockholders' equity 395,000
<u>Current Liability</u>
Accounts Payable 28,000
<u>Long-Term Liability</u>
Notes Payable (Due in 2years) <u> 40,000</u>
Total Liabilities <u> 68,000 </u>
Total Equity $ Liabilities <u> 463,000 </u>
Conclusion
As both the Total Assets and Total Equity and Liabilities are each equal to $463,000, it implies the financial statement is accurately prepared since both must always be equal.
