Answered: Relentless Corporation, a merchandising…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter5: The Income Statement And The Statement Of Cash Flows

Section: Chapter Questions

Problem 3RE: Shaquille Corporation began the current year with inventory of 50,000. During the year, its...

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Relentless Corporation, a merchandising business, has provided the following information at the end of the year on December 31, 2014: $ Gross sales 150,000 Sales returns and allowances 10,000 Beginning inventory 15,000 Ending inventory 20,000 Purchases 85,000 Selling expenses 14,000 Administrative expenses 16,000 Rental income (non-operating) 9,000 Interest expenses 3,000 Beginning capital 60,000 Withdrawals during the year 6,000 Income tax paid 3,000 Required: A. Prepare an income statement for the period. B. The owner decides to keep 50% of the balance of the net income in the retained earnings account. Prepare the owner’s equity section of the balance sheet at the end of the accounting period.

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