Bridgeport Company recently hired a new accountant whose first task was to prepare the financial statements for the year ended December 31, 2021. The following is what he produced:

BRIDGEPORT COMPANY Income Statement December 31, 2021
Sales								$396,000
Less: Unearned revenue						$5,600
Purchase discounts						3,400		9,000
Total revenue								387,000
Cost of goods sold
Purchases						231,500
Less: Purchase returns and allowances						4,000
Net purchases						235,500
Add: Sales returns and allowances						7,400
Cost of goods available for sale						242,900
Add: Freight out						9,400
Cost of selling merchandise								252,300
Gross profit margin								134,700
Operating expenses
Freight in						4,400
Insurance expense						10,400
Interest expense						2,400
Rent expense						17,900
Salaries expense						42,100
Total operating expenses								77,200
Profit margin								57,500
Other revenues
Interest revenue				$1,400
Investment by owner				3,300		4,700
Other expenses
Depreciation expense				6,400
Drawings by owner				48,500		54,900		(50,200	)
Profit from operations								$7,300

 

BRIDGEPORT COMPANY Balance Sheet Year Ended December 31, 2021
Assets
Cash					$16,800
Accounts receivable					8,000
Merchandise inventory, January 1, 2021					30,100
Merchandise inventory, December 31, 2021					23,900
Equipment			$64,000
Less: loan payable (for equipment purchase)			49,900		14,100
Total assets					$92,900
Liabilities and Owner's Equity
Long-term investment					$49,900
Accumulated depreciation—equipment					19,200
Sales discounts					2,900
Total liabilities					72,000
Owner’s equity					20,900
Total liabilities and owner’s equity					$92,900

The owner of the company, Lily Oliver, is confused by the statements and has asked you for your help. She doesn’t understand how, if her Owner’s Capital account was $69,300 at December 31, 2020, owner’s equity is now only $20,900. The accountant tells you that $20,900 must be correct because the balance sheet is balanced. The accountant also tells you that he didn’t prepare a statement of owner’s equity because it is an optional statement. You are relieved to find out that, even though there are errors in the statements, the amounts used from the accounts in the general ledger are the correct amounts.
 
Prepare the correct multiple-step income statement. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Prepare the correct statement of owner’s equity. (List items that increase owner's equity first.)

Prepare the correct classified balance sheet. You determine that $5,000 of the loan payable on the equipment must be paid during 2022. (List Current Assets in order of liquidity.)