Acc101 Accounting: Comprehensive Problem 3 (CP3) McMinn Retail Inc

Acc101 Accounting Comprehensive Problem 3 - McMinn Retail Inc. (2 worksheet tabs) McMinn Retail, Inc., is a retailer that has engaged you to assist in the preparation of its financial statements at December 31, 2009. Following are the correct adjusted account balances, in alphabetical order, as of that date. Each balance is the “normal” balance for that account. (Hint: The “normal” balance is the same as the debit or credit side that increases the account.) Accounts payable...........................................................................$12,750 Accounts receivable........................................................................ 2,600 Accumulated Depreciation: office equipment................................. 12,000 Additional paid-in capital (common stock)...................................... 7,000 Bonds payable (due December 31, 2012)...................................... 22,500 Cash................................................................................................ 15,200 Common Stock (1,800 shares, $10 par 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.................................................................................................. 37,500 Merchandise Inventory...................................................................... 17,500 Notes Payable (Due December 31, 2010)........................................ 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 Prepaid Rent....................................................................................... 1, 800 Rent Expense..................................................................................... 6,100 Retained Earnings (January 2009)..................................................... 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 Instructions a. Prepare an income statement for the year ended December 31, 2009, which includes amounts for gross profit, income before income taxes, and net income. List expenses (other than cost of goods sold and income tax expense) in order, from the largest to the smallest dollar balance. You may ignore earnings per share. b. Prepare a statement of retained earnings for the year ending December 31, 2009. c. Prepare a statement of financial position (balance sheet) as of December 31, 2009, following these guidelines: - Include separate asset and liability categories for those assets which are “current.” - Include and label amounts for total assets, total liabilities, total stockholders' equity, and total liabilities and stockholders' equity. - Present deferred income taxes as a noncurrent liability. - To the extent information is available that should be disclosed, include that information in your statement.
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