ACC 211 Chapter 10 Assignment Review ProblemName ______________________________________________ Date _________________There is one problem with multiple parts that deal with preparation of financial statements that we covered either in chapter 4 (multi-step income statement) or chapters 2 & 3 (statement of retained earnings and classified balance sheet). Total assignment is worth 35 points.P1.Charlotte Companys adjusted trial balance on December 31, 2013, follows.Debit CreditCash $20,000Accounts Receivable 35,000Prepaid expenses 10,000Supplies 8,000Merchandise inventory . . . . . . . . . . . 43,000Equipment . . . . . . . 184,000Patent 20,000Accumulated Depreciation – Equip 70,000Accounts payable 20,000Salaries payable 8,000Taxes payable 4,000Interest payable 1,000Note Payable (long term) . . . . . . . . . . . . . . 75,000Common stock . . . . . . . . . . . . . . . . 100,000Retained earnings 20,000Dividends paid . . . . . . . . . . . . 8,000Sales . . . . . . . . . . . . . . . . . . . . . . . . . 300,000Sales discounts . . . . . . . . . . . . . . . . . 4,000Sales returns and allowances . . . . . . . 10,000Cost of goods sold . . . . . . . . . . . . . . 120,000Sales salaries expense . . . . . . . . . . . . 45,000Rent expense Selling space . . . . . . . 15,000Store supplies expense . . . . . . . . . . . . 3,000Advertising expense . . . . . . . . . . . . . . 25,000Office salaries expense . . . . . . . . . . . . 40,000Rent expense Office space . . . . . . . 6,000Office supplies expense . . . . . . . . . . . 2,000Totals . . . . . . . . . . . . . . . . . . . . . . . . $ 598,000 $ 598,000Required.
Part 1. Prepare a multiple-step income statement that includes separate categories for selling expenses and for general and administrative expenses. Check figure: Net income should be $30,000. (15 points total).CHARLOTTE COMPANYIncome StatementFor Year Ended Dec 31, 2013Part 2. Prepare a statement of retained earnings for the same year ended Dec 31, 2013. Retained earnings at the beginning of the year was $20,000. Check figure: Ending retained earnings as of Dec 31, 2013 should be $42,000. (5 points)CHARLOTTE COMPANY, incStatement of Retained EarningsFor Month Ended Dec 31, 2013Part 3. Prepare a classified balance sheet as of December 31, 2013 for the same company. Check figures: Total current assets should be $116,000 and total assets should be $250,000. (15 points)CHARLOTTE COMPANYBalance SheetDecember 31, 2013ACC 211 Chapter 10 Assignment Review ProblemName ______________________________________________ Date _________________There is one problem with multiple parts that deal with preparation of financial statements that we covered either in chapter 4 (multi-step income statement) or chapters 2 & 3 (statement of retained earnings and classified balance sheet). Total assignment is worth 35 points.P1.Charlotte Companys adjusted trial balance on December 31, 2013, follows.Debit CreditCash $20,000Accounts Receivable 35,000Prepaid expenses 10,000Supplies 8,000Merchandise inventory . . . . . . . . . . . 43,000Equipment . . . . . . . 184,000Patent 20,000Accumulated Depreciation – Equip 70,000Accounts payable 20,000Salaries payable 8,000Taxes payable 4,000Interest payable 1,000Note Payable (long term) . . . . . . . . . . . . . . 75,000Common stock . . . . . . . . . . . . . . . . 100,000Retained earnings 20,000Dividends paid . . . . . . . . . . . . 8,000Sales . . . . . . . . . . . . . . . . . . . . . . . . . 300,000Sales discounts . . . . . . . . . . . . . . . . . 4,000Sales returns and allowances . . . . . . . 10,000Cost of goods sold . . . . . . . . . . . . . . 120,000Sales salaries expense . . . . . . . . . . . . 45,000Rent expense Selling space . . . . . . . 15,000Store supplies expense . . . . . . . . . . . . 3,000Advertising expense . . . . . . . . . . . . . . 25,000Office salaries expense . . . . . . . . . . . . 40,000Rent expense Office space . . . . . . . 6,000Office supplies expense . . . . . . . . . . . 2,000Totals . . . . . . . . . . . . . . . . . . . . . . . . $ 598,000 $ 598,000Required.Part 1. Prepare a multiple-step income statement that includes separate categories for selling expenses and for general and administrative expenses. Check figure: Net income should be $30,000. (15 points total).CHARLOTTE COMPANYIncome StatementFor Year Ended Dec 31, 2013Part 2. Prepare a statement of retained earnings for the same year ended Dec 31, 2013. Retained earnings at the beginning of the year was $20,000. Check figure: Ending retained earnings as of Dec 31, 2013 should be $42,000. (5 points)CHARLOTTE COMPANY, incStatement of Retained EarningsFor Month Ended Dec 31, 2013Part 3. Prepare a classified balance sheet as of December 31, 2013 for the same company. Check figures: Total current assets should be $116,000 and total assets should be $250,000. (15 points)CHARLOTTE COMPANYBalance SheetDecember 31, 2013
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