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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881

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BuyFindarrow_forward

Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881
Textbook Problem
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Problem1-63B

Income Statement, Retained Earnings Statement. and Balance Sheet

McDonald Marina provides decking and cleaning services for pleasure boats at its marina in southern Florida. The following account balances are available:

Chapter 1, Problem 63BPSB, Problem1-63B Income Statement, Retained Earnings Statement. and Balance Sheet McDonald Marina

Required:

1. Prepare a single-step income statement. a retained earnings statement and a classified balance sheet for the year ended December 31, 2019.

2. CONCEPTUAL CONNECTION How would a multiple-step income statement be different from the single-step income statement you prepared for McDonald Marina?

To determine

Concept Introduction:

Income Statement:

Income Statement is the part of the financial statement which is prepared to calculate the net income earned by the organization. In the income statement, all expenses are subtracted from the revenues to calculate the net income. It is prepared for a particular period.

There are two ways to present and income statement: Single-step and Multi-step. In the, multi-step income statement the net income calculated after showing multiple steps. In this statement operating and items are separate from non operating items.

Requirement-1:

To Prepare:

The Single step income statement, Statement on retained earnings and classified balance sheet for the year 2019.

Explanation

There are two ways to present and income statement: Single-step and Multi-step. In the, multi-step income statement the net income calculated after showing multiple steps. In this statement operating and items are separate from non operating items. The Single step income statement, Statement on retained earnings and classified balance sheet for the year 2019 are prepared as follows:

    McDonald Marina
    Single Step Income Statement
    For the year 2019
    Revenue:
    Service revenue $ 1,932,300
    Total Revenue$ 1,932,300
    Expenses:
    Wages Expense $ 987,200
    Utilities Expense $ 239,400
    Rent Expense $ 14,600
    Depreciation expense- Building $ 21,500
    Depreciation expense- Equipment $ 246,300
    Income tax Expense $ 21,700
    Supplies Expense $ 89,100
    Interest Expense $ 236,000
    Total Expense$ 1,855,800
    Net Income $ 76,500
    McDonald Marina
    Statement of retained earnings
    For the year 2019
    Beginning Balance $ 128,600
    Add: Net Income $ 76,500
    Less: Dividends $ (25,300)
    Ending Balance $ 179,800
    McDonald Marina
    Balance Sheet
    As on Dec...
To determine

Concept Introduction:

Income Statement:

Income Statement is the part of the financial statement which is prepared to calculate the net income earned by the organization. In the income statement, all expenses are subtracted from the revenues to calculate the net income. It is prepared for a particular period.

There are two ways to present and income statement: Single-step and Multi-step. In the, multi-step income statement the net income calculated after showing multiple steps. In this statement operating and items are separate from non operating items.

Requirement-2:

To Indicate:

The difference between Single step income statement and multi step income statement for the company.

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