Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
With the information given prepare a statement of stockholders wqui
Transcribed Image Text:Multiple-Step Income Statement and Report Form of Balance Sheet
The following selected accounts and their current balances appear in the ledger of Prescott Inc. for the fiscal year ended September 30, 20Y8:
$187,875 Retained Earnings (as of Sept. 30, 20Y7) $ 571,050
337,500 Dividends
281,250
850,500 Sales
78,750 Cost of Goods Sold
33,750 Sales Salaries Expense
27,000 Advertising Expense
259,200 Depreciation Expense-Store Equipment
111,375 Miscellaneous Selling Expense
1,150,875 Office Salaries Expense
420,075 Rent Expense
109,350 Insurance Expense
78,750 Depreciation Expense- Office Equipment
21,600 Office Supplies Expense
117,000 Miscellaneous Administrative
33,750 Interest Expense
Cash
Accounts Receivable
Inventory
Estimated Returns Inventory
Office Supplies
Prepaid Insurance
Office Equipment
Accumulated Depreciation- Office Equipment
Store Equipment
Accumulated Depreciation- Store Equipment
ccounts Payable
Customer Refunds Payable
Salaries Payiple
Note Payable (due evenly over next five years)
Common Stock
Instructions:
8,025,750
4,893,750
874,800
103,275
18,675
4,500
174,150
89,775
51,638
36,450
3,712
4,275
27,000
Expert Solution
Step 1
To prepare a statement of stockholders' equity, we need to calculate net income.
Income statement of Prescott Inc.
For the year ended September 30, 20Y8
| Particulars | Amount in $ | Amount in $ |
| Sales | 8,025,750 | |
| Cost of goods sold | 4,893,750 | |
| Gross Profit | 3,132,000 | |
| Operating Expenses:- | ||
| Selling expense:- | ||
| Sales salaried expenses | 874,800 | |
| Advertising expenses | 103,275 | |
| Depreciation expense- store equipment | 18,675 | |
| Miscellaneous selling expenses | 4,500 | |
| Total selling expenses | 1,001,250 | |
| Administrative expenses:- | ||
| Office salaries expenses | 174,150 | |
| Rent expense | 89,775 | |
| Insurance expenses | 51,638 | |
| Depreciation expense- office equipment | 36,450 | |
| Office supplies expense | 3,712 | |
| Miscellaneous administration Expense | 4,275 | |
| Total administration Expense | 360,000 | |
| Total operating expenses | 1,361,250 | |
| Operating income | 1,770,750 | |
| Other expenses:- | ||
| Interest expense | 27,000 | |
| Net Income | 1,743,750 | |
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