Prepare statement of retained earning-income statement

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Reference no: EM131317933

Extra Credit Homework                                         

You are thinking of investing in one of two corporations, both in the same industry, the Bill Gate Corporation. Selected data follows:

Sales and expense data for the year ended 12/31/16:

Gross revenue $41,285,000; Returns $1,710,000

Selling expenses:

Payroll $3,342,000; benefits $1,050,000, travel $350,200; supplies $450,150, commissions $520,300, marketing $810,000, postage $210,300, misc $41,500.

Administrative expenses:

Distribution $1,428,000, warehouse $959,000, IT $625,200, finance $529,400, human resources $413,250; administrative $310,000, depreciation $122,000

Other Gains and Losses

Sale of machine with a book value of $27,500 for $4,000 cash.

          : Loss due to flood damage of $422,000.

Irregular Items:

None.

In addition, Bill Gate Corporation discovered an inventory error from 2015 which had the effect of overstating income for 2015 by $65,000 before tax.

Tax rates: 35%

Outstanding shares of common stock:

2,000,000 $1PV shares authorized, 800,000 shares issued and outstanding.

Dividends: both companies paid cash dividends of $1.50 per share.

Selected Balance Sheet Information:

Cash $1,822,000

marketable securities (at cost $410,300, at fair value $495,400)

Account receivable (gross $1,725,400 less allowance for doubtful accounts of $112,100)

Finished goods inventory, opening balance $189,400, purchases $12,443,400, ending balance $175,610

Prepaid expenses $40,210

Plant assets at cost $21,400,000, accumulated depreciation $7,312,000.

Accounts payable, $613,410

accrued expense payable $191,260

bonds payable $4,814,693

capital stock $1,450,000

beginning retained earnings $2,325,250.

1) Prepare a statement of Retained Earning

2) Prepare Income Statement including EPS

3) Prepare multiple step Balance Sheet.Capital Stock must be broken down between common stock and additional paid in capital.

Reference no: EM131317933

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