MS, Inc. is a retail that engaged you to assist in the preparation of its financial statement at December 31, 2018. Following are the correct adjusted is alphabetical order, as of that date. Each balance is the "normal" balance for that accountthe normal balance is the same as the debit or credit Side that increases the accountAccounts payable……………………………      $12,750Accounts receivables ………………………..         2,600Accumulated depreciation: office equipment.         12,000  Additional paid in capital (common stock)…..        13,000Bonds payable (due December 31, 2021) ……        22,500Cash………………………………………….          19,200Common stock (1,800 shares, $10par value)..            18,000Cost of goods sold……………………………         100,575 Deferred income taxes……………………….        5,750Depreciation expense: office equipment                  2.750Dividends declared……………………………       5,000 Income tax expense…………………………..        8,190Insurance expense…………………………….            900Land…………………………………………..          39,500Merchandise inventory.....................................          17,500Notes payable (due December 31, 2019)…….            2,500Office equipment……………………………..          41,000Office supplies.................................................           900Office supplies expense………………………             520Preferred stock (250 shares, $20 par value)….           5,000Premium on bonds payable…………………..           1,750repaid rent……………………………………           1,800Rent expense…………………………………           6,100Retained earnings (January 2018)……………          21,050Salaries expense………………………………          88,095Sales ………………………………………….          226,000Sales returns and allowances………………….           2,500Sales taxes payable…………………………….        3,200Treasury stock (200 common shares at cost)….        2,250Utilities expense………………………………         4,120I need a. Prepare an income statement for the year ended December 31, 2018for gross profit, income before income taxes, and net income. List expenses (0ther than cost ofSods sold and income tax expense) in order, from the largest to the smallest dollar balance. I may ignore earnings per share.b. Prepare a statement of retained earnings for the year ending December 31, 2018.c. Prepare a statement of financial position (balance sheet) as of December 31. 2018, followingthese guidelines:-Include separate asset and liability categories for those items that are “current."assets, total liabilities, total stockholders' equity, and-Include and label amounts for total liabilities and total stockholders' equity.-Present deferred income taxes as a noncurrent liability-To the extent information is available that should be disclosed, include the parentheticaldisclosure of that information.

Question
Asked Sep 18, 2019
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MS, Inc. is a retail that engaged you to assist in the preparation of its financial statement at December 31, 2018. Following are the correct adjusted is alphabetical order, as of that date. Each balance is the "normal" balance for that account
the normal balance is the same as the debit or credit Side that increases the account

Accounts payable……………………………      $12,750

Accounts receivables ………………………..         2,600

Accumulated depreciation: office equipment.         12,000 
Additional paid in capital (common stock)…..        13,000

Bonds payable (due December 31, 2021) ……        22,500
Cash………………………………………….          19,200

Common stock (1,800 shares, $10par value)..            18,000
Cost of goods sold……………………………         100,575
Deferred income taxes……………………….        5,750
Depreciation expense: office equipment                  2.750
Dividends declared……………………………       5,000
 Income tax expense…………………………..        8,190

Insurance expense…………………………….            900
Land…………………………………………..          39,500
Merchandise inventory.....................................          17,500
Notes payable (due December 31, 2019)…….            2,500
Office equipment……………………………..          41,000
Office supplies.................................................           900
Office supplies expense………………………             520
Preferred stock (250 shares, $20 par value)….           5,000
Premium on bonds payable…………………..           1,750
repaid rent……………………………………           1,800

Rent expense…………………………………           6,100
Retained earnings (January 2018)……………          21,050
Salaries expense………………………………          88,095
Sales ………………………………………….          226,000
Sales returns and allowances………………….           2,500
Sales taxes payable…………………………….        3,200
Treasury stock (200 common shares at cost)….        2,250

Utilities expense………………………………         4,120

I need
a. Prepare an income statement for the year ended December 31, 2018
for gross profit, income before income taxes, and net income. List expenses (0ther than cost of
Sods sold and income tax expense) in order, from the largest to the smallest dollar balance. I may
ignore earnings per share.

b. Prepare a statement of retained earnings for the year ending December 31, 2018.
c. Prepare a statement of financial position (balance sheet) as of December 31. 2018, following
these guidelines:
-Include separate asset and liability categories for those items that are “current."
assets, total liabilities, total stockholders' equity, and
-Include and label amounts for total liabilities and total stockholders' equity.

-Present deferred income taxes as a noncurrent liability

-To the extent information is available that should be disclosed, include the parenthetical
disclosure of that information.

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Expert Answer

Step 1

a.  Prepare an income statement.

MS, Inc
Income statement
For the year ended December 31l, 2018
226,000
2,500
223,500
100,575
122,925
Sales
Less: Sales retuns and allowances
Net sales
Less: Cost of goods sold
Gross profit
Less: Operating expenses
Salaries expense
Rent expense
Utilities expense
88,095
6,100
4,120
2,750
Depreciation expense: office equipment
Insurance expense
Office supplies expense
Total operating expenses
Income before income taxes
Less: Income tax expense
Net income
900
520
102,485
20,440
8.190
12,250
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MS, Inc Income statement For the year ended December 31l, 2018 226,000 2,500 223,500 100,575 122,925 Sales Less: Sales retuns and allowances Net sales Less: Cost of goods sold Gross profit Less: Operating expenses Salaries expense Rent expense Utilities expense 88,095 6,100 4,120 2,750 Depreciation expense: office equipment Insurance expense Office supplies expense Total operating expenses Income before income taxes Less: Income tax expense Net income 900 520 102,485 20,440 8.190 12,250

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Step 2

b. Prepare a statement of ...

MS, Inc
Statement of retained earnings
For the year ended December 31, 2018
|Retained earnings (January 2018)
Add: Net income
21,050
12,250
33,300
Less: Dividends
|Retained earnings (December 2018)
5,000
28,300
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MS, Inc Statement of retained earnings For the year ended December 31, 2018 |Retained earnings (January 2018) Add: Net income 21,050 12,250 33,300 Less: Dividends |Retained earnings (December 2018) 5,000 28,300

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