Financial & Managerial Accounting (ACC 602) Statement Exercise - Multiple-step Income Statement, Retained Earnings Statement, Classified Balance Sheet

Week 2 In-Class Exercise




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Sample Statements

Multiple-Step Income Statement

Income Statement | Amount
——————————————
Service Revenue: $17,000
Expenses:
Cost of Goods Sold: 10,000
Gross Profit: 7,000

Operating Expenses:
Building Rental Expense: 900
Insurance Expense: 500
Depreciation Expense: 500
Supplies Expense: 200
Other Selling, General, and Admin. Expense: 200
Total Operating Expense: (2,300)
Operating Income: 4,700

Other Revenues and Gains:
Rent Revenue: 1000

Other Expenses and Losses:
Interest Expense: (100)

Income Before Income Tax: 5,600
Income Tax Expense: 200
Net Income: $5,400

, Retained Earnings Statement

Retained Earnings Statement | Amount
————————————————
Beginning Retained Earnings: $19,920
Add: Net Income: 5,400

Less: Dividends: 600
Ending Retained Earnings: $24,720


Classified Balance Sheet Statement

Classified Balance Sheet | Amount
——————————————-
Current Assets:
Cash: 1,400
Accounts Receivable: 1,800
Inventory: 500
Supplies: 4,000
Short-term Investments: 200
Notes Receivable: 1,000
Prepaid Insurance: 2,300
Total Current Assets: $11,200
Long-term Investments:
Investment in XYZ Co.: 5,300
Investment in Real Estate: 2,000
Total Long-term Investments: $7,300
Property, Plant, and Equipment:
Land: 2000
Equipment: 16,000
Building: 20,000
Accumulated Depreciation: (2,500)
$35,500
Intangible Assets:
Patents: 300
Goodwill: 2,020
Total Assets: $56,320

Current Liabilities:
Accounts Payable: 2,000
Interest Payable: 100
Current Maturities of LT Debts: 3,000
Unearned Revenue: 900
Salaries Payable: 300
Total Current Liabilities: $6,300
Long-term Liabilities:
LT Debt: 10,000
Deferred Income Tax: 300
Notes Payable: 5,000
Total LT Liabilities: $15,300