Financial Statement The adjusted trial balance of Eureka Company for the year ended December 31, 2024, is as follows:

Instructions
Prepare a multiple-step income statement, statement of owner’s equity, and classified balance sheet. The notes payable are due on January 10, 2025. The notes receivable are due on June 30, 2025. The allowance for doubtful accounts applies to accounts receivable only.

Taking It Further

Dane Eureka, the owner of Eureka Company, is pondering the possibility of changing its credit policies to increase sales. Currently, the company’s terms are n/30, and he believes that terms of 1/10, n/45 will increase sales by about 40%. Do you agree with Dane’s assessment? Are there any potential disadvantages that Dane should consider? Explain.

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Cash Accounts Receivable Notes Receivable Merchandise Inventory Equipment Allowance for Doubtful Accounts Accumulated Depreciation-Equipment Notes Payable Accounts Payable D. Eureka, Capital D. Eureka, Drawings Sales Interest Revenue Cost of Goods Sold Salaries Expense Rent Expense Bad Debt Expense Service Charge Expense Debit $ 9,600 4,050 9,450 15,000 11,250 1,500 12,000 2,100 1,050 90 60 $66,150 Credit $ 450 1,500 1,650 900 42,000 19,500 150 $66,150