Parker Company has the following ledger accounts and adjusted balances as of December 31, 2017. All accounts have normal balances. Parker’s income tax rate is 20%. Parker has 300,000 shares of Common Stock authorized and 100,000 shares of Common Stock issued and outstanding.

Accounts Payable……………………………. 39,000

Accounts Receivable………………………… 270,000

Accumulated Depreciation-Building………… 75,000

Accumulated Depreciation-Equipment………. 60,000

Administrative Expenses……………………. 60,000

Allowance for Doubtful Accounts…………… 30,000

Bonds Payable……………………………….. 250,000

Building……………………………………… 750,000

Cash…………………………………………. 39,000

Common Stock……………………………… 400,000

Cost of Goods Sold…………………………. 570,000

Dividends…………………………………… 20,000

Equipment…………………………………… 290,000

Income from Operations of Division X…….. 60,000

(Division X is a component of Parker Company)

Interest Revenue…………………………….. 40,000

Inventory……………………………………...420,000

Land (held for future use)...…………………. 300,000

Land (used for building)…………………….. 165,000

Loss from Sale of Division X...........................120,000 (Division X is a component of Parker Company)

Loss on Sale of Investments.……………….. .. 15,000

Mortgage Payable …………..………………. 375,000*

Paid-In Capital in Excess of Par……………...224,000

Premium on Bonds Payable………………….. 10,000

Prepaid Insurance……………………………. 15,000**

Retained Earnings, January 1, 2017………… 375,000

Sales Discounts………………………………. 30,000

Sales Returns and Allowances……………….. 50,000

Sales Revenue……………………………...1,535,000

Selling Expenses……………………………. 195,000

Trademark…………………………………… 45,000

*$25,000 of the principal comes due in 2019.

**Two years insurance paid in advance. ?

Instructions: Use this information to prepare a multiple-step income statement, a retained earnings statement, and a classified balance sheet.

Answer rating: 100% (QA)

MultipleStep Income Statement Sales Revenue 1535000 Sales Returns and Allowances 50000 Sales Discoun... View the full answer