Financial Statement Preparation Below is information for Hercules Corp for the y

Question

Financial Statement Preparation Below is information for Hercules Corp for the year ending December 31, 2012:

Required: Prepare a multi-step income statement, statement of retained earnings, and classified balance sheet for the company. Use the Scantron 886-E pages to prepare your work.

$ 4,000 Current portion of notes payable Accounts Payable Dividends Insurance Expense Equipment Interest Payable Accounts Receivable Comm on Stock Cost of Goods Sold Rent Expense Sal aries Payable Sal es Revenue 3,500 18,000 10,000 4,600 17,500 2,000 2,400 2,500 42,000 3,000 Inventory 7,000 Retained earnings, January 1 Salaries Expense 81,500 300 Accumulated Depreciation 24,000 Prepaid Insurance 72,000 Interest Expense 50,000 Depreciation Ex pense 25,500 Cash 9,700 Long-tem Notes Payable (Noncurrent portion) 100,000 45,500

Explanation / Answer

Income Statement for the year ended December, 31 2012 Sales Revenue 100000 Less: Expenses Cost of Goods sold 50000 Insurance 7000 Rent 25500 Salaries 4600 Depreciation 2500 Interest 2400 92000 Net Income 8000 Statement of Retained Earnings Retained earnings Opening 10000 add: Net Income 8000 Less: Dividend -3000 Cl. Retained earnings 15000 Balance Sheet Common Stock 72000 Retained earnings 15000 Accounts Payable 4000 Interest Payable 300 Salaries Payable 9700 Notes Payable 3500 Long Term Notes Payable 45500 Total Liabilities 150000 Equipment 81500 Less: dep -17500 64000 Accounts Receivable 24000 Inventory 18000 Prepaid Insurance 2000 Cash 42000 Total assets 150000

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