Prepare a single-step income statement and a retained earnings statement.

(Single-Step Income, Retained Earnings, Periodic Inventory) Presented below is the trial balance of Thompson Corporation at December 31, 2014.

 

THOMPSON CORPORATION

Trial Balance

December 31, 2014

	Debits	Credits
Purchase Discounts		$10,000
Cash	$189,700
Accounts Receivable	105,000
Rent Revenue		18,000
Retained Earnings		160,000
Salaries and Wages Payable		18,000
Sales		1,100,000
Notes Receivable	110,000
Accounts Payable		49,000
Accumulated Depreciation-Equipment		28,000
Sales Discounts	14,500
Sales Returns	17,500
Notes Payable		70,000
Selling Expenses	232,000
Administrative Expenses	99,000
Common Stock		300,000
Income Tax Expense	53,900
Cash Dividends	45,000
Allowance for Doubtful Accounts		5,000
Supplies	14,000
Freight-in	20,000
Land	70,000
Equipment	140,000
Bonds Payable		100,000
Gain on Sale of Land		30,000
Accumulated Depreciation-Building		19,600
Inventory	89,000
Building	98,000
Purchases	610,000
Totals	$1,907,600	$1,907,600

 

A physical count of inventory on December 31 resulted in an inventory amount of $64,000 thus, cost of goods sold for 2014 is $645,000

 

Instructions

Prepare a single-step income statement and a retained earnings statement. Assume that the only changes in retained earnings during the current year were from net income and dividends. 30,000 shares of common stock are outstanding the entire year.

Solution: