Question

Preparing Both an Income Statement and a Balance Sheet from a Trial Balance
Dynamite Sales (organized as a corporation on September 1, 2010) has completed the accounting cycle for the second year, ended August 31, 2012. Dynamite also has completed a correct trial balance as follows:


Required:
Complete the financial statements, as follows:
a. Classified (multiple-step) income statement for the reporting year ended August 31, 2012. Include income tax expense, assuming a 30 percent tax rate. Use the following subtotals: Gross Profit, Total Operating Expenses, Income from Operations, Income before Income Taxes, and Net Income, and show EPS.
b. Classified balance sheet at the end of the reporting year, August 31, 2012. Include (1) income taxes for the current year in Income Taxes Payable and (2) dividends in Retained Earnings. Use the following captions (list each item under these captions).
Assets Stockholders’ Equity
Current assets Contributed capital
Noncurrent assets Retained earnings
Liabilities
Current liabilities
Long-termliabilities


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  • CreatedDecember 12, 2011
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