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BIG TOMMY CORPORATION Profit and Loss December 31 Debit CreditSales $ 540,000 Cost of Goods Sold $ 327,000 Sales Returns andAllowances 14,800 Sales Discounts 9,000 Salaries and Wages Expense70,000 Office Expense 25,000 Travel Expenses 1,000 Income TaxExpense 27,960 Net Profit 65,240 Totals $ 540,000 $ 540,000 Preparean Income statement

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Jamar Ferry
Jamar FerryLv2
28 Sep 2019

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debit credit
Cash 54,339
Investment Securities--AFS 72,000
ACCRUED INTEREST RECEIVABLE 1000
Accounts Receivable 48,607
Allowance for Doubtful Accounts 3,022
Allowance for Sales Returns andAllowances 972
Merchandise Inventory 449,807
Prepaid Insurance 7,434
Store Supplies 2,700
Land 285,820
Building 476,895
Accumulated Depreciation: Building 55,027
Office & Store Equipment 163,941
Accumulated Depreciation: Office &Store Equipment 54,763
Delivery Trucks 198,545
Accumulated Depreciation: DeliveryTrucks 41,260
Accounts Payable 51,274
FICA Taxes Payable 5,406
FEDERAL INCOME TAX WITHHOLDINGPAYABLE 3,401
Unemployment Taxes Payable 814
Union Dues Payable 180
Salaries & Wages Payable 37,085
accured utility payable 506
Mortgage Payable 200,000
Accrued Interest Payable 667
Common Stock 100,000
PIC in Excess of Par 1,000,000
Retained Earnings 85,937
Sales 1,779,369
Sales Returns 36,893
Sales Discounts 12,027
INTEREST REVENUE 1,000
Purchases 0
Purchase Returns 0
Purchase Discounts 0
Freight In 0
cost of goods sold 1,157,524
Salaries & Wages Expense 304,693 0
Payroll Tax Expense 41,573 0
Advertising Expense 11,874 0
REPAIR EXPENSE 1,700 0
STORE SUPPLIES EXPENSE 10,021 0
Utilities Expense 20,410 0
INSURANCE EXPENSE 6,034 0
DEPRECIATION EXPENSE 46,459 0
DOUBTFUL ACCOUNTS EXPENSE 928 0
Interest Expense 9,459 0
Totals 3,420,683

3,420,683

Prepare an income statement for 2016 (Multiple step format).

I am extremely lost on how to answer this questions below and Ihave a test on this stuff next week. Please help!

On October 1, 2010, Madison Ltd. acquired all the shares ofDobson Ltd. for $849,600. On that date, Dobson’s statement offinancial position showed share capital of $540,000 and retainedearnings of $273,600. In addition, at the acquisition date, all ofDobson’s identifiable assets and liabilities had carrying valuesthat equaled their fair values.

Madison and Dobson’s financial statements for September 30, 2014are presented below:

Statement of Financial Position

As of September 30, 2014

MadisonLtd. Dobson Ltd.

Assets:

Current assets:

Cash $ 144,000 $ 131,400

Short-terminvestments 27,000 122,400

Accountsreceivable 18,000 540,000

Inventory 302,400 64,800

491,400 858,600

Non-current assets:

Land 126,000 216,000

Equipment,net 75,600 27,000

Investment inDobson 849,600 ___-___

1,051,200 243,000

1,542,600 1,101,600

Liabilities and shareholders’ equity:

Current liabilities:

Accountspayable 9,000 23,400

Non-current liabilities:

Deferred incometaxes 93,600 54,000

102,600 77,400

Shareholders’ equity:

Sharecapital 900,000 540,000

Retainedearnings 540,000 484,200

1,440,000 1,024,200

$1,542,600 $1,101,600

Statement of Income

For the year ended September 30, 2014

MadisonLtd. Dobson Ltd.

Salesrevenue $2,152,500 $ 1,670,400

Cost ofsales 1,598,400 1,207,225

Grossprofit 554,100 463,175

Expenses:

Salaries andbenefits 103,500 57,600

Amortization 9,360 8,640

Other 7,200 __-___

120,060 66,240

Other revenues and expenses:

Investmentincome 300 1,225

Loss on disposal ofasset (1,800) __-___

432,540 398,160

Income taxexpense 173,016 213,264

Netincome $259,524 $ 184,896

Statement of Changes in Equity

For the year ended September 30, 2014

MadisonLtd. Dobson Ltd.

Share capital, October 1,2013 $ 900,000 $ 540,000

Changes during theyear ___-___ ___-___

Share capital, September 30,2014 900,000 540,000

Retained earnings, October 1,2013 424,476 299,304

Netincome 259,524 184,896

Dividendsdeclared (144,000) ______

Retained earnings, September 30,2014 540,000 484,200

$1,440,000 $ 1,024,200

Additional information:

Both companies use a perpetual inventory system, have aSeptember 30 year-end, and a 30% tax rate. Madison uses the entitytheory method for consolidation.

On June 30, 2014, Madison sold some equipment to Dobson for$10,800. At that date, the net book value of the equipment toMadison was $12,600. The equipment is expected to have a remaininguseful life of 10 years.

On April 1, 2014, Madison purchased $90,000 of merchandise fromDobson. Dobson had acquired the goods for $54,000. On July 15,Madison sold half of the goods to a customer for $50,400. Theremaining goods were still in Madison’s inventory at its 2014fiscal year-end.

At October 1, 2013, Madison had some goods in inventory that ithad purchased from Dobson at May 25, 2013. The profit on thesegoods was $10,800. These goods were sold by December 31, 2013.

In 2011, Madison sold a tract of land to Dobson for anaccounting gain of $36,000. Dobson plans to build a warehouse andoffice complex on the land in 2015.

Required:

Prepare Madison’s consolidated financial statements for the yearended September 30, 2014. (Round numbers to the nearest dollar, andshow all your calculations.)

Question 10 (15 points)

The following is a partial Adjusted Trial Balance for Alpha Company for the month:

Alpha Company

Adjusted Trial Balance (partial)

January 31, 2016

Accounts

Debit

Credit

Inventory

$2,750

Sales

$11,500

Sales Discounts

200

Sales Returns & Allowances

1,200

Purchases

4,000

Purchases Discounts

150

Purchase Returns & Allowances

450

Freight In

50

Advertising Expense

150

Depreciation Expense

130

Freight Out

70

Income Tax Expense

500

Salaries Expense

550

Utilities Expense

100

Additionally, Inventory for December 31, 2015 was $2,600. Prepare a multiple-step income statement.

What amount should Alpha Company report on a Multi-Step Income Statement for the following items:

1. Net Sales

2. Cost of Goods Available for Sales

3. Gross Profit

4. General & Administrative Expenses

5. Income before Taxes

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