Can you please show step by step including income statement and balance sheet. I've completed this assignment already but unsure if I calculated the federal income tax payable correctly and did the income statement and balance sheet correctly. Here is information regarding certain accounts · Bad debt expense is 1% of net sales. (Net sales = Sales - Sales returns and allowances - Sales discounts taken) · Depreciation Expense adjustment is $25,000 · Interest owed but not yet recorded (accrued interest) is $1,800. · Expired rent (Prepaid Expenses) is $3,000. · Federal Income Tax is calculated at 21% of pre-tax income. § Make this adjustment last. What you should do is make all the above adjustments (enter them in the adjustment columns), then prepare the adjusted trial balance and the income statement columns. Take note of the income (Revenues less Expenses) and multiply that number (pre-tax income) by the 21% tax rate. That will be the federal income tax expense/federal income taxes payable. Make the federal income tax adjusting entries in the Adjustment columns. Then move onto to finish the Adjusted Trial Balance, Income Statement columns, and Balance Sheet columns.

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To provide a stepbystep guide for preparing the income statement and balance sheet with the given information we need the specific account balances an... View the full answer