Question

Using the adjusted trial balance given, prepare a(n)

1) income statement

2) statement of retained earnings

3) balance sheet

*in good form.

3 Cs Inc

Adjusted Trial Balance

December 31, 2017

Account	Debit	Credit
Accounts Payable		120,000
Accounts Receivable	150,000
Accumulated Depreciation		20,000
Bonds Payable		100,000
Cash	70,000
Common Stock		20,000
Cost of Goods Sold	280,000
Depreciation Expense	10,000
Dividends	20,000
Equipment	200,000
Income Taxes Expense	40,000
Interest Payable		5,000
Inventory	60,000
Land	100,000
Note Payable (18 months)		105,000
Paid-in Capital in Excess of Par - Common		125,000
Paid-in Capital in Excess of Par - Preferred		20,000
Patents, net of amortization	50,000
Preferred Stock		10,000
Rent Expense	45,000
Retained Earnings, Jan. 1		30,000
Salaries Expense	100,000
Sales Revenue		600,000
Treasury Stock	15,000
Utilities Expense	15,000
	$ 1,155,000	$ 1,155,000

Answer 1

Cs Inc
Income Statement
For the year ended December 31, 2017
Sales revenue		$ 600,000
Less: Cost of goods sold		$ 280,000
Cost of goods sold		$ 320,000
Less: Operating expenses
Depreciation expense	$    10,000
Rent expense	$    45,000
Salaries expense	$ 100,000
Utilities expense	$    15,000
Total operating expense		$ 170,000
Income before income tax		$ 150,000
Income tax expense		$    40,000
Net income		$ 110,000

2.

Cs Inc
Retained Earnings statement
For the year ended december 31, 2017
Opening Balance	$      30,000
Add: Net income	$   110,000
Less: Dividends paid	$   (20,000)
Closing balance	$   120,000

3.

Cs Inc
Balance Sheet
For the year ended december 31, 2017
Assets
Current assets
Cash		$    70,000
Accounts Receivable		$ 150,000
Inventory		$    60,000
Total current assets			$ 280,000
Property, Plant and Equipment
Land		$ 100,000
Equipment	$ 200,000
Accumulated depreciation	$ (20,000)	$ 180,000
Total Property, plant and equipment			$ 280,000
Intangible assets
Patents, net of amortization			$    50,000
Total Assets			$ 610,000
Liabilities and stock holders equity
Liabilities
Current liabilities
Accounts payable		$ 120,000
Interest payable		$      5,000
Total current liabilities			$ 125,000
Non-current liabilities
Bonds payable		$ 100,000
Note payable		$ 105,000
Total non-current liabilities			$ 205,000
Stock Holders equity
Common stock	$    20,000
Preferred stock	$    10,000
Paid-in Capital in Excess of Par - Common	$ 125,000
Paid-in Capital in Excess of Par - Preferred	$    20,000
Total contributed capital		$ 175,000
Retained earnings		$ 120,000
Less: Treasury stock		$ (15,000)
Total Stock holders equity			$ 280,000
Total liabilities and stock holders equity			$ 610,000

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