Concept explainers
A trial balance is the summary of all the ledger accounts. The trial balance is prepared to check the total balance of the debit column with the total balance of the credit column, which must be equal. The trial balance is usually prepared to check accuracy of ledger balances, and before the preparation of financial statements.
Adjusted trial balance:
The adjusted trial balance is the summary of all the ledger accounts that appears on the ledger accounts after making all
Income statement:
An income statement is one of the financial statements which shows the revenues, and expenses of the company. The income statement is prepared to ascertain the net income/loss of the company, by deducting the expenses from the revenues.
To prepare: An income statement for the year 2017 for Company L.
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FINANCIAL ACCOUNTING: TOOLS WP ACCESS
- The following selected accounts and their current balances appear in the ledger of Clairemont Co. for the fiscal year ended May 31, 2019: Instructions 1. Prepare a multiple-step income statement. 2. Prepare a statement of owners equity. 3. Prepare a balance sheet, assuming that the current portion of the note payable is 50,000. 4. Briefly explain how multiple-step and single-step income statements differ.arrow_forwardFedEx Corporation had the following revenue and expense account balances (in millions) for a recent year ending May 31: Prepare an income statement.arrow_forwardPrince Corporations accounts provided the following information at December 31, 2019: What should be the current balance of retained earnings? a. 520,000 b. 580,000 c. 610,000 d. 670,000arrow_forward
- FedEx Corporation had the following revenue and expense account balances (in millions) for a recent year ending May 31: a.Prepare an income statement. b.Compare your income statement with the income statement that is available at the FedEx Corporation Web site, (http://investors.fedex.com). Click on Annual Report and Download Annual Report. What similarities and differences do you see?arrow_forwardReinhardt Company reported revenues of $122,000 and expenses of $83,000 on its 2019 income statement. In addition, Reinhardt paid of dividends during 2019. On December 31, 2019, Reinhardt prepared closing entries. The net effect of the closing entries on retained earnings was a(n): a. decrease of $4,000. b. increase of $35,000. c. increase of $39,000. d. decrease of $87,000.arrow_forwardThe following income statement items appeared on the adjusted trial balance of Schembri Manufacturing Corporation for the year ended December 31, 2018 ($ in thousands): sales revenue, $15,300; cost of goods sold, $6,200;selling expenses, $1,300; general and administrative expenses, $800; interest revenue, $85; interest expense, $180.Income taxes have not yet been recorded. The company’s income tax rate is 40% on all items of income or loss.These revenue and expense items appear in the company’s income statement every year. The company’s controller, however, has asked for your help in determining the appropriate treatment of the following nonrecurring transactions that also occurred during 2018 ($ in thousands). All transactions are material in amount.1. Investments were sold during the year at a loss of $220. Schembri also had unrealized gains of $320 for theyear on investments.2. One of the company’s factories was closed during the year. Restructuring costs incurred were $1,200.3.…arrow_forward
- Below is a portion of the December 31, 2024, adjusted trial balance for a company. Prepare an income statement for the year ended December 31, 2024. Accounts Debit Credit Common Stock 340,000 Retained Earnings 76,000 Service Revenue 540,000 Salaries Expense 408,000 Rent Expense 28,000 Utilities Expense 48,000 Interest Expense 4,000 Totals $1,047,000 $1,047,000arrow_forwardThe adjusted trial balance of Miller Company at December 31, 2020, includes the following accounts: Owner's Capital $16,400. Owner's Drawings $7,000. Service Revenue $39,000, Salaries and Wages Expense $16,000, Insurance Expense $2,000, Rent Expense $4,000, Supplies Expense $1,500, and Depreciation Expense $1,300. Prepare an income statement for the year.arrow_forwardThe Bonita Corporation reports the following adjusted account balances, shown in alphabetical order, at the end of its fiscal year, February 28, 2021: Accounts payable 12,600 Income tax payable 4,500 Accounts receivable 28,400 Insurance expense 3,500 Accumulated depreciation—equipment 5,600 Prepaid insurance 2,600 Cash 18,200 Rent expense 5,900 Common shares 6,580 Retained earnings 20,220 Depreciation expense 4,600 Salaries expense 45,050 Dividends declared 1,900 Salaries payable 3,450 Equipment 22,800 Supplies 300 Fees earned 91,700 Supplies expense 4,100 Income tax expense 4,800 Utilities expense 2,500 During the year ended February 28, 2021, common shares were issued for $5,000. Net income 21250 Prepare a statement of changes in equity. (For decreases use either a negative sign preceding the number, e.g. -45 or parenthesis, e.g. (45).)arrow_forward
- On December 31, 2018, Ditka Inc. had Retained Earnings of $272,800 before its closing entries were prepared and posted. During 2018, the company had service revenue of $173,100 and interest revenue of $83,800. The company used supplies in the amount of $90,400, advertising expenses were $16,900, salaries and wages totaled $19,050, and income tax expense was calculated as $14,700. During the year, the company declared and paid dividends of $6,500.Required: Prepare the closing entries dated December 31, 2018. Prepare T-account for the Retained Earnings account. Enter the beginning balance into the T-account, post the closing entries, and then determine the ending balance.arrow_forwardThe adjusted trial balance of Pacific Scientific Corporation on December 31, 2016, the end of the company’s fiscal year, contained the following income statement items ($ in millions): sales revenue, $2,106; cost of goods sold, $1,240; selling expenses, $126; general and administrative expenses, $105; interest expense, $35; and gain on sale of investments, $45. Income tax expense has not yet been recorded. The income tax rate is 40%. If the company’s accountant prepared a multiple-step income statement, what amount would appear in that statement for (a) operating income and (b) nonoperating income?arrow_forwardThe trial balance for K and J Nursery, Incorporated, listed the following account balances at December 31, 2024, the end of its fiscal year: cash, $16,000; accounts receivable, $11,000; inventory, $25,000; equipment (net), $80,000; accounts payable, $14,000; salaries payable, $9,000; interest payable, $1,000; notes payable (due in 18 months), $30,000; common stock, $50,000. Determine the year-end balance in retained earnings for K and J Nursery, Incorporated. how much is retained earnings ?arrow_forward
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