The following additional information is available at December 31, 2018:                                                             Insurance of $450,000 was paid on May 1, 2018 for the 10-months to February 2019. The furniture and fixtures have an estimated useful life of 10 years and is being depreciated on the straight-line method down to a residual value of $100,000. The computer equipment was acquired on March 1, 2018 and is being depreciated over 10 years on the double-declining method of depreciation, down to a residue of $60,000. Wages earned by employees NOT yet paid amounted to 15,000 at December 31, 2018. A physical count of inventory at December 31, reveals $180,000 worth of inventory on hand. At December 31, $140,000 of the previously unearned sales revenue had been earned. The aging of the Accounts Receivable schedule at December 31 indicated that the estimated uncollectible on account receivable should be $45,000. REQUIRED: Prepare Columbus Ltd multiple-step income statement for the year ended December 31, 2018.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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The following additional information is available at December 31, 2018:

                                                           

  • Insurance of $450,000 was paid on May 1, 2018 for the 10-months to February 2019.
  • The furniture and fixtures have an estimated useful life of 10 years and is being depreciated on the straight-line method down to a residual value of $100,000.
  • The computer equipment was acquired on March 1, 2018 and is being depreciated over 10 years on the double-declining method of depreciation, down to a residue of $60,000.
  • Wages earned by employees NOT yet paid amounted to 15,000 at December 31, 2018.
  • A physical count of inventory at December 31, reveals $180,000 worth of inventory on hand.
  • At December 31, $140,000 of the previously unearned sales revenue had been earned.
  • The aging of the Accounts Receivable schedule at December 31 indicated that the estimated uncollectible on account receivable should be $45,000.

REQUIRED:

  1. Prepare Columbus Ltd multiple-step income statement for the year ended December 31, 2018.
Trial Balance
A/C Name
DR
CR
Cash
1,000,000
Accounts receivable
Allowance for bad debt
450,000
15,000
Merchandise Inventory
Store Supplies
Prepaid Insurance
Furniture and Fix tures
Accumulated deprecia tion -Furniture and Fixtures
Computer Equipment
Accumulated deprecia tion Computer Equipment
Accounts payable
Wages payable
Unearned Sales re vemue
Notes Payable, Long Term
John Cohumbus, Capital
John Cohumbus, Withdrawals
186,000
120,000
450,000
1,000,000
360,000
600,000
320,000
150,000
900,000
2,200,000
95,000
Sales revemue
1,761,000
Sales discount
120,000
95,000
Sales returns and allowances
Cost of goods sold
Wages Expense
Insurance Expense
Depreciation Expense - Furniture and Fixtures
Depreciation Expense -Computer Equipment
Store Supplies Expense
Utlities Expense
Bad Debt Expense
Interest Expense
650,000
450,000
180,000
40,000
180,000
90,000
Total
5,706,000
5,706,000
Transcribed Image Text:Trial Balance A/C Name DR CR Cash 1,000,000 Accounts receivable Allowance for bad debt 450,000 15,000 Merchandise Inventory Store Supplies Prepaid Insurance Furniture and Fix tures Accumulated deprecia tion -Furniture and Fixtures Computer Equipment Accumulated deprecia tion Computer Equipment Accounts payable Wages payable Unearned Sales re vemue Notes Payable, Long Term John Cohumbus, Capital John Cohumbus, Withdrawals 186,000 120,000 450,000 1,000,000 360,000 600,000 320,000 150,000 900,000 2,200,000 95,000 Sales revemue 1,761,000 Sales discount 120,000 95,000 Sales returns and allowances Cost of goods sold Wages Expense Insurance Expense Depreciation Expense - Furniture and Fixtures Depreciation Expense -Computer Equipment Store Supplies Expense Utlities Expense Bad Debt Expense Interest Expense 650,000 450,000 180,000 40,000 180,000 90,000 Total 5,706,000 5,706,000
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