Use the following information to prepare a multistep income statement and a classified balance sheet for Brown

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Use the following information to prepare a multistep income statement and a classified balance sheet for Brown Company for Year 1.

Operating expenses .....................................................................................$ 45,000 

Cash ................................................................................................................$ 46,000
Land .................................................................................................................75,000 

Interest receivable (short term) ...................................................................1,600
Accumulated depreciation ............................................................................46,000 

Cash flow from investing activities ..............................................................(96,000)
Accounts payable ............................................................................................35,000 

Allowance for doubtful accounts .................................................................14,000
Unearned revenue .........................................................................................27,000 

Interest payable (short term) .........................................................................6,000
Warranties payable (short term) ....................................................................4,500 

Sales revenue ....................................................................................................900,000
Equipment ..........................................................................................................96,000

Uncollectible accounts expense .......................................................................25,000
Notes payable (long term) .................................................................................140,000 

Interest expense ..................................................................................................16,000
Salvage value of equipment ...............................................................................10,000 

Accounts receivable .............................................................................................88,000
Dividends ..............................................................................................................15,000 

Salaries payable ....................................................................................................48,000
Warranty expense .................................................................................................7,200 

Supplies ..................................................................................................................4,500
Beginning retained earnings ................................................................................41,100 

Prepaid rent ............................................................................................................18,000
Interest revenue ......................................................................................................4,200 

Common stock ........................................................................................................90,000
Gain on sale of equipment .....................................................................................7,000 

Cost of goods sold ....................................................................................................575,000
Inventory ...................................................................................................................126,000 

Salaries expense .......................................................................................................102,000
Notes receivable (short term) .................................................................................12,500 

Building .......................................................................................................................110,000


Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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Related Book For  book-img-for-question

Introductory Financial Accounting for Business

ISBN: 978-1260299441

1st edition

Authors: Thomas Edmonds, Christopher Edmonds

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