Reference no: EM132836069
Problem - The Smiley Corporation started business on January 1, 2019; its fiscal year ends on December 31. Its accounting records for 2019 appear below after all transactions and adjusting entries have been recorded but before the books have been closed. (Amounts are in thousands of dollars; ignore income taxes):
Accounts Payable $6,000
Accumulated Depreciation 3,750
Building 150,000
Cash Flows Used for Operations (7,600)
Cash Flows Used for Investing (150,000)
Cash Flows from Financing 370,000
Common Stock 250,000
Cost of Sales 80,000
Depreciation Expense 3,750
Interest Expense 3,600
Inventory 70,000
Loan Payable (due 2020) 120,000
Sales 160,000
Wages Expense 20,000
Required -
1. Prepare an income statement in good form for Smiley Corporation for the period from the start of business on January 1, 2019, to the end of the year, December 31, 2019
2. Prepare a schedule explaining the change in retained earnings between the start of the business on January 1, 2019, and December 31, 2019.
3. Prepare a comparative classified balance sheet in good form for Smiley Corporation as of December 31, 2019.