Income and Retained Earnings Statements
Selected account balances of Connell Company for 2008 along with additional information as of December 31 are as follows:
Bad Debt Expense |
$ 32,000 |
Delivery Expense |
425,000 |
Depreciation Expense—Delivery Trucks |
29,000 |
Depreciation Expense—Office Building |
25,000 |
Depreciation Expense—Office Equipment |
10,000 |
Depreciation Expense—Store Equipment |
25,000 |
Dividend Revenue |
35,000 |
Dividends |
150,000 |
Employee Pension Expense |
190,000 |
Freight In |
145,000 |
Gain on Sale of Office Equipment |
8,000 |
Income Taxes, 2008 |
427,425 |
Interest Revenue |
10,000 |
Inventory, January 1, 2008 |
775,000 |
Loss on Sale of Investment Securities |
20,000 |
Loss on Write Down of Obsolete Inventory |
75,000 |
Miscellaneous General Expenses |
45,000 |
Miscellaneous Selling Expenses |
50,000 |
Officers’ and Office Salaries |
550,000 |
Property Taxes Expense |
100,000 |
Purchase Discounts |
47,700 |
Purchases |
4,633,200 |
Retained Earnings, January 1, 2008 |
550,000 |
Sales |
8,125,000 |
Sales Discounts |
55,000 |
Sales Returns and Allowances |
95,000 |
Sales Salaries |
521,000 |
(a) Inventory was valued at year end as follows:
Cost |
$825,000 |
Write down of obsolete inventory |
75,000 |
$750,000 |
(b) Number of Connell shares of stock outstanding: 60,000
Instructions:
Prepare a multiple step income statement and statement of retained earnings for the year ended December 31, 2008.