Use the following information to prepare a multi-step income statement and a balance sheet for Sherman...

3.9 Ratings (511 Votes)

	Income Statement

	Sales revenue		$ 360,000.00
Less:	Cost of goods sold		$ 158,000.00
	Gross margin		$ 202,000.00
	Operating expenses
	Salaries expense	$ 79,000.00
	Uncollectible accounts expense	$ 9,100.00
	Operating expenses	$ 72,000.00
	Total operating expenses		$ 160,100.00
	Operating Income		$ 41,900.00
	Non operating items
	Interest Revenue		$ 6,400.00
	Net Income		$ 48,300.00

	Balance Sheet
	Assets
	Cash		$ 49,100.00
	Accounts Receivable	$ 66,000.00
Less:	Allowance	$ (8,800.00)	$ 57,200.00
	Inventory		$ 99,300.00
	Interest Receivable		$ 2,500.00
	Prepaid Rent		$ 13,500.00
	Supplies		$ 2,200.00
	Notes Receivable		$ 34,000.00
	Land		$ 50,000.00
	Total Assets		$ 307,800.00

	Liabilities and Stockholder's Equity
	Current Liabilities
	Accounts Payable		$ 56,000.00
	Salaries Payable		$ 22,000.00
	Total Liabilities		$ 78,000.00

	Stockholder's Equity
	Common stock		$ 100,000.00
	Retained earnings		$ 129,800.00
	Total stockholder's equity		$ 229,800.00
	Total liabilities and equity		$ 307,800.00

Workings:

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Salaries Expense	$	79,000	Operating Expenses	$	72,000
Common Stock		100,000	Cash Flow from Investing Activities		88,400
Notes Receivable (short term)		34,000	Prepaid Rent		13,500
Allowance for Doubtful Accounts		8,800	Land		50,000
Uncollectible Accounts Expense		9,100	Cash		49,100
Supplies		2,200	Inventory		99,300
Interest Revenue		6,400	Accounts Payable		56,000
Sales Revenue		360,000	Salaries Payable		22,000
Dividends		4,500	Cost of Goods Sold		158,000
Interest Receivable (short term)		2,500	Accounts Receivable		66,000
Beginning Retained Earnings		86,000

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