Posted: April 23rd, 2016
Prepare a multiple-step income statement for Music Warehouse.
Prepare a statement of changes in stockholder’s equity for Music Warehouse.
Adjusted Trial Balance
December 31, 2008
Accounts Receivable 5,625
Accumulated Depreciation 75,000
Notes Payable 85,000
Accounts Payable 53,600
Interest Payable 4,750
Common Stock 10,000
Additional Paid-in Capital 120,000
Retained Earnings 59,980
Sales Discounts 22,675
Cost of Goods Sold 723,000
Repairs & Maintenance 5,225
Interest Expense 4,400
Depreciation Expense 9,500
Loss as a result of hurricane damage on the building: $17,000 (assume that the building is not located in an area that sustains frequent hurricane damage.)
Loss because of the discontinuation of the cassette tape music segment: $26,875
Beginning of the year balance of common stock: $8,000 (assume that changes are related to issuance of common stock.)
Beginning of the year balance of additional paid-in capital: $102,000
Effective income tax rate: 35%
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