Question

Under His Eye Spying Company opened for business on 1.1.16.
Prepare the following:
Multi-Step Income Statement
Retained Earnings Statement
Classified Balance Sheet
	Adjusted Trial Balance
	For the Year Ended 12.31.16
Cash	300,000
Accounts Receivable	50,000
Supplies	25,000
Merchandise Inventory - EB	200,000
Equipment	160,000
Accumulated Depreciation - Equipment		40,000
Land	200,000
Accounts Payable		35,000
Salaries Payable		10,000
Note Payable (Due on 1.1.20)		60,000
Bonds Payable (Due on 5.31.35)		140,000
Common Stock		160,000
Paid-in Capital in Excess of Par - CS		55,000
Retained Earnings		0
Treasury Stock	25,000
Dividends	65,000
Sales Revenue		750,000
Rent Revenue		10,000
Cost of Goods Sold	180,000
Salary Expense	40,000
Supplies Expense	5,000
Depreciation Expense - Equipment	10,000
TOTAL	1,260,000	1,260,000

Answer 1

Requirement:1

Multi-Step Income Statement:

Eye Spying Company
Income statement
For the year ended 12.31.16
Sales		$       750,000
(less):Cost of goods sold		$     (180,000)
Gross Profit		$       570,000
Expenses:
Selling and Administrative Expenses:
Salaries Expense	$    40,000
Supplies Expense	$      5,000
Depreciation expense-Equipment	$    10,000
Total operating expenses		$         55,000
Operating Income ( Gross profit - Operating Expense)		$       515,000
Other revenue and expense:
Rent Revenue		$         10,000
Net income		$       525,000

Requirement:2

Eye Spying Company
Retained Earnings Statement
For the year ended 12.31.16
Beginning Balance	$                  -
Add:Net Income	$      525,000
Less:
Dividends (Cash Dividend)	$      (65,000)
Retained Earnings Closing Balance	$      460,000

Requirement:3

Classified Balance Sheet:

Eye Spying Company
Balance sheet
For the year ended 12.31.16
Assets			Liabilities
Current assets:			Current liabilities:
Cash		$ 300,000	Account Payable		$          35,000
Accounts Receivable		$    50,000	Salaries payable		$          10,000
Supplies		$    25,000
Merchandise inventory		$ 200,000	Total current liabilities		$          45,000
			Long term liabilities
Total current assets		$ 575,000	Notes payable(Due on 1.1.20)		$          60,000
			Bonds Payable (Due on 5.31.35)		$        140,000
Property,plant, and equipment:			Total long term Liabilities		$        200,000
Land		$ 200,000	Total Liabilities		$        245,000
Equipment	$ 160,000		Stockholders` Equity
Less: Accumulated Depreciation	$ (40,000)		Common Stock [160000+55000]	$    215,000
Net Equipment		$ 120,000	Retained Earnings	$    460,000
			Less: Treasury Stock	$    (25,000)
Total Long-term assets		$ 320,000	Total stockholders` equity		$        650,000
Total Assets		$ 895,000	Total liabilities and stockholders` equity		$        895,000

Notes:

1) Common Stock = Common Stock + Paid in capital in excess of par = 160000+55000 =215,000