Carr Company has the following ledger accounts and adjustedbalances as of December 31, 2019. All accounts have normalbalances. Carr’s income tax rate is 20%. Carr has 300,000 shares ofCommon Stock authorized, 100,000 shares of Common Stock issued, and95,000 shares of Common Stock outstanding.
AccountsPayable……………………………. 58,500
AccountsReceivable………………………… 405,000
AccumulatedDepreciation-Building………… 112,500
AccumulatedDepreciation-Equipment………. 90,000
AdministrativeExpenses……………………. 90,000
Allowance forDoubtful Accounts…………… 45,000
BondsPayable……………………………….. 400,000
Building……………………………………..1,125,000
Cash…………………………………………. 58,500
CommonStock……………………………… 600,000
Cost of GoodsSold…………………………. 855,000
Discount onBonds Payable………………… 10,000
Dividends…………………………………… 30,000
Equipment…………………………………… 435,000
Income fromOperations of Division X…….. 90,000
(Division X isa component of Carr Company)
InterestRevenue…………………………….. 60,000
Inventory……………………………………...630,000
Land (held forfuture use)...…………………. 450,000
Land (used forbuilding)…………………….. 247,500
Loss from Saleof Division X...........................180,000
(Division X isa component of Carr Company)
Loss on Sale ofInvestments.……………….. .. 22,500
MortgagePayable …………..………………. 562,500*
Paid-In Capitalin Excess of Par……………...396,000
PrepaidRent…………………………………. 22,500**
RetainedEarnings, January 1, 2019………… 562,500
SalesDiscounts………………………………. 45,000
Sales Returnsand Allowances……………….. 75,000
SalesRevenue……………………………...2,302,500
SellingExpenses……………………………. 292,500
Trademark…………………………………… 67,500
TreasuryStock………………………………. 60,000
*$40,000 of the principal comes due in 2019.
**Two years rent on offsite document storage paid inadvance.
Instructions:
Use this information to prepare a multiple-step incomestatement, a retained earnings statement, and a classified balancesheet.
