Com Prob 3

COMPREHENSIVE PROBLEM 3
SPRINGDALE RETAIL, INC.
a.
Springdale Retail, Inc.
Income Statement
For the Year Ended December 31, 2015
Sales
Less: Sales returns and allowances
Net Sales
Cost of goods sold
Gross profit
Operating expenses:
Salaries
Rent Expense
Utilities expense
Depreciation expense: office equipment
Insurance expense
Office supplies expense
Income before income taxes
Income tax expense
Net income

$
$

88,095
6,100
4,120
2,750
900
520
$
$

226,000
2,500
223,500
100,575
122,925

102,485
20,440
8,190
12,250

b.
Springdale Retail, Inc.
Statement of Retained Earnings
For the Year Ending December 31, 2015
Retained earnings, January 1, 2015
Add: Net income (from income statement)

$
$

Deduct: Dividends declared
Ending Retained earnings, December 31, 2015

$

21,050
12,250
33,300
5,000
28,300

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COMPREHENSIVE PROBLEM 3
SPRINGDALE RETAIL, INC.
(continued)
c.
Springdale Retail, Inc.
Statement of Financial Position
As of December 31, 2015
ASSETS
Current assets:
Cash
Accounts receivable
Merchandise inventory
Office supplies
Prepaid rent
Total current assets
Non-current Assets
Office equipment
Less: Accumulated depreciation
Land

$

$
$

41,000
12,000

Total Assets
LIABILITIES
Current liabilities:
Accounts payable
Notes payable
Sales taxes payable
Total current liabilities
Non-current liabilities:
Bonds payable
Premium on bonds payable
Deferred income taxes
Total Liabilities
STOCKHOLDERS' EQUITY
Preferred stock, $20 par value, 250 shares issued and outstanding Common Stock, $10 par value, 1,800 shares issued
Additional paid-in capital (common stock)
Retained earnings
Less: Treasury stock (200 common shares at cost)
Total Stockholders' Equity
Total Liabilities and Stockholders' Equity

$

15,200
2,600
17,500
900
1,800
38,000

29,000
37,500
$

104,500

$

$

12,750
2,500
3,200
18,450

$

24,250
5,750
48,450

$

5,000