Question

1.Balance sheet

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Prepare a classified balance sheet in proper form. The term“proper form” implies the inclusion of 4 columns for classificationof account titles and dollar amounts, the listing of account titlesunder the correct headings and in proper order. For example,current assets are listed in order of liquidity. The appropriateuse of dollar signs and rulings (underscores). Strive forprofessionalism.

INCOME STATEMENT

Beautiful by Design, Inc.
Income Statement
For the Year Ended December 31, 20xx
Revenue
Sales Revenue .........................................		$15,850,000
Design Revenue ………………………….		4,650,000
Net Revenue........................................			$20,500,000
Cost of Goods Sold .................................			4,962,500
Gross Profit……………………………….			15,537,500
Operating Expenses
SellingExpenses
SalesCommissions.......................	$2,000,000
Advertising Expense.....................	750,000	2,750,000
Administrative Expenses
WagesExpense.............................	4,000,000
Rent Expense..............................	1,150,000
DepreciationExpense ..................	1,128,750
SuppliesExpense.........................	700,750
Restructuring Costs………………	50,000
Bad Debt Expense………………..	10,000
Insurance Expense………………..	10,000	7,049,500	9,799,500
Income from Continuing Operations			5,738,000
Other Income/Gains (Expense/Losses)
Interest Revenue .................................		2,000
Interest Expense..................................		(201,250)
Loss on Sale of Equipment….…………		(400,000)	(599,250)
Income from Continuing Operations before taxes			5,138,750
Income Tax Expense (40%)			2,055,500
Income from Continuing Operations			3,083,250
Discontinued Operations
Loss from operations of discontinuedcomponent
(including gain on sale/disposal of$100,000)		(300,000)
Income Tax Benefit		120,000	(180,000)
Net Income.............................................			$2,903,250

Account balances:

Cash-7882000

Accounts Receivable-1400000

Inventory-2798000

Allowance for doubtful accounts-40000

Prepaid Supplies- 93000

Assets held for sale- 0

Land-17500000

Buildings-7975000

Equipment-9800000

Accumulated depreciation- equipment- 5130000

accumulated depreciation- buildings- 1395000

accounts payable- 1500000

interest payable- 101250

bonds payable- 5000000

Common stock ($10 par)- 12500000

Retained earnings-13837500

unearned design revenue- 4650000

sales commissions- 2000000

Cost of goods sold- 4962500

advertising expense- 750000

rent expense- 1150000

wages expense- 4000000

supplies expense- 700750

interest expense- 201250

loss on income from discontinued operations- 300000

prepaid rent- 300000

paid in capital in excess of par- 5000000

long term notes payable- 500000

investment in ABC bonds- 2000000

investments in XYZ bonds- 300000