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The Outdoors Corporation, which sells camping and hiking equipment, had the following adjusted account balances on December 31, 2021. During 2021 the Outdoor Corporation sold its river tubing component of the business, the River Raft Company. The Outdoors Corporation correctly accounted for the sale as a discontinued operation. Account Debit Credit $ 13,700 Accounts payable Accounts receivable Accumulated depreciation – equipment Additional paid-in capital - common stock Advertising expense Allowance for doubtful accounts Bad debt expense Cash Common stock, $5 par Cost of goods sold Depreciation expense (60% selling, 40% administrative) Dividends $ 43,000 30,500 87,000 13,000 3,000 1,500 24,600 65,000 384,000 14,000 4,500 Dividend revenue 1,000 Equipment Held-to-maturity debt securities, due 5/31/24 Income tax expense Income tax payable Interest expense 143,600 38,000 ?? ?? 4,000 Interest revenue 2,300 Inventory Land held for future use Loss on sale of equipment Marketable equity securities Miscellaneous expense (70% selling, 30% administrative) Note payable – due May 31, 2027 Prepaid insurance Rent expense (80% selling, 20% administrative) Retained earnings, 1/1/21 Salaries expense (20% selling, 80% administrative) 52,900 135,100 5,800 22,700 29,000 73,700 1,900 174,000 93,900 205,000 Sales revenue 1,127,000 Sales commission expense 168,000 32,500 22,000 Sales returns and allowances Trading debt securities Treasury stock Unearned sales revenue 9,000 3,000

The Outdoors Corporation, which sells camping and hiking equipment, had the following adjusted account balances on December 31, 2021. During 2021 the Outdoor Corporation sold its river tubing component of the business, the River Raft Company. The Outdoors Corporation correctly accounted for the sale as a discontinued operation. Account Debit Credit $ 13,700 Accounts payable Accounts receivable Accumulated depreciation – equipment Additional paid-in capital - common stock Advertising expense Allowance for doubtful accounts Bad debt expense Cash Common stock, $5 par Cost of goods sold Depreciation expense (60% selling, 40% administrative) Dividends $ 43,000 30,500 87,000 13,000 3,000 1,500 24,600 65,000 384,000 14,000 4,500 Dividend revenue 1,000 Equipment Held-to-maturity debt securities, due 5/31/24 Income tax expense Income tax payable Interest expense 143,600 38,000 ?? ?? 4,000 Interest revenue 2,300 Inventory Land held for future use Loss on sale of equipment Marketable equity securities Miscellaneous expense (70% selling, 30% administrative) Note payable – due May 31, 2027 Prepaid insurance Rent expense (80% selling, 20% administrative) Retained earnings, 1/1/21 Salaries expense (20% selling, 80% administrative) 52,900 135,100 5,800 22,700 29,000 73,700 1,900 174,000 93,900 205,000 Sales revenue 1,127,000 Sales commission expense 168,000 32,500 22,000 Sales returns and allowances Trading debt securities Treasury stock Unearned sales revenue 9,000 3,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Additional information for 2021: (1) Management of the Outdoors Corporation does not plan to sell the marketable equity securities in 2022. The Outdoors Corporation has less than a 20% ownership in the equity securities. (2) As previously mentioned, during 2021 the Outdoors Corporation disposed of River Rafts Company, the river tubing component of its business. River Rafts Company had operated at a before-tax loss of $12,000 in 2021. The Outdoors Corporation disposed of the river tubing component at a before-tax gain of $40,000. These amounts were not included in the income statement accounts shown on page 1. (3) The Outdoors Corporation classifies its Bad Debt Expense as Selling Expenses. (4) The Outdoors Corporation did not pay any estimated taxes in 2021. (5) The effective income tax rate for 2021 was 20%. (6) You are not required to calculate earnings per share for the year ended December 31, 2021. REQUIRED: On this page and the following pages prepare in good form the Outdoor Corporation's multiple-step Income Statement for the year ended December 31, 2021, Retained Earnings Statement for the year ended December 31, 2021, and its classified Balance Sheet at December 31, 2021. Remember to include the correct heading for each financial statement.
Transcribed Image Text:Additional information for 2021: (1) Management of the Outdoors Corporation does not plan to sell the marketable equity securities in 2022. The Outdoors Corporation has less than a 20% ownership in the equity securities. (2) As previously mentioned, during 2021 the Outdoors Corporation disposed of River Rafts Company, the river tubing component of its business. River Rafts Company had operated at a before-tax loss of $12,000 in 2021. The Outdoors Corporation disposed of the river tubing component at a before-tax gain of $40,000. These amounts were not included in the income statement accounts shown on page 1. (3) The Outdoors Corporation classifies its Bad Debt Expense as Selling Expenses. (4) The Outdoors Corporation did not pay any estimated taxes in 2021. (5) The effective income tax rate for 2021 was 20%. (6) You are not required to calculate earnings per share for the year ended December 31, 2021. REQUIRED: On this page and the following pages prepare in good form the Outdoor Corporation's multiple-step Income Statement for the year ended December 31, 2021, Retained Earnings Statement for the year ended December 31, 2021, and its classified Balance Sheet at December 31, 2021. Remember to include the correct heading for each financial statement.
The Outdoors Corporation, which sells camping and hiking equipment, had the following adjusted account balances on December 31, 2021. During 2021 the Outdoor Corporation sold its river tubing component of the business, the River Rafts Company. The Outdoors Corporation correctly accounted for the sale as a discontinued operation. Account Debit Credit Accounts payable Accounts receivable Accumulated depreciation – equipment Additional paid-in capital – common stock $ 13,700 $ 43,000 30,500 87,000 Advertising expense Allowance for doubtful accounts Bad debt expense Cash Common stock, $5 par Cost of goods sold 13,000 3,000 1,500 24,600 65,000 384,000 Depreciation expense (60% selling, 40% administrative) Dividends 14,000 4,500 Dividend revenue 1,000 Equipment Held-to-maturity debt securities, due 5/31/24 143,600 38,000 Income tax expense Income tax payable ?? ?? Interest expense 4,000 Interest revenue 2,300 52,900 Inventory Land held for future use Loss on sale of equipment Marketable equity securities Miscellaneous expense (70% selling, 30% administrative) Note payable – due May 31, 2027 Prepaid insurance 135,100 5,800 22,700 29,000 73,700 1,900 174,000 Rent expense (80% selling, 20% administrative) Retained earnings, 1/1/21 Salaries expense (20% selling, 80% administrative) Sales revenue Sales commission expense 93,900 205,000 1,127,000 168,000 Sales returns and allowances 32,500 Trading debt securities Treasury stock Unearned sales revenue 22,000 9,000 3,000
Transcribed Image Text:The Outdoors Corporation, which sells camping and hiking equipment, had the following adjusted account balances on December 31, 2021. During 2021 the Outdoor Corporation sold its river tubing component of the business, the River Rafts Company. The Outdoors Corporation correctly accounted for the sale as a discontinued operation. Account Debit Credit Accounts payable Accounts receivable Accumulated depreciation – equipment Additional paid-in capital – common stock $ 13,700 $ 43,000 30,500 87,000 Advertising expense Allowance for doubtful accounts Bad debt expense Cash Common stock, $5 par Cost of goods sold 13,000 3,000 1,500 24,600 65,000 384,000 Depreciation expense (60% selling, 40% administrative) Dividends 14,000 4,500 Dividend revenue 1,000 Equipment Held-to-maturity debt securities, due 5/31/24 143,600 38,000 Income tax expense Income tax payable ?? ?? Interest expense 4,000 Interest revenue 2,300 52,900 Inventory Land held for future use Loss on sale of equipment Marketable equity securities Miscellaneous expense (70% selling, 30% administrative) Note payable – due May 31, 2027 Prepaid insurance 135,100 5,800 22,700 29,000 73,700 1,900 174,000 Rent expense (80% selling, 20% administrative) Retained earnings, 1/1/21 Salaries expense (20% selling, 80% administrative) Sales revenue Sales commission expense 93,900 205,000 1,127,000 168,000 Sales returns and allowances 32,500 Trading debt securities Treasury stock Unearned sales revenue 22,000 9,000 3,000
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