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

DYNAMITE SALES Trial Balance At August 31, 2012 Debit Credit Account Titles $ 47,700 38,320 Cash Accounts receivable Office supplies Company vehicles (delivery vans) Accumulated depreciation, company vehicles Equipment Accumulated depreciation, equipment Accounts payable Income taxes payable Salaries payable Long-term debt Capital stock (par $1; 29,000 shares) Paid-in capital Retained earnings (on September 1, 2011I) Dividends declared and paid during the current year 270 27,000 $ 9,000 2,700 900 16,225 1,350 25.000 29,000 4,500 6,615 7.200 Sales revenue 81.000 Cost of goods sold Operating expenses (detail omitted to conserve time) Depreciation expense (on vehicles and including $3,450 on equipment) Interest expense Income tax expense (not yet computed) 27,000 16,200 4,950 2,250 $173,590 Totals $173,590