Question

Hi, I need help with problem 1.

If possible both the balance sheet and the income statement. BUT I'm mostly struggling with the income statement calculating income before taxes.

Thank you

CHAPTER 16 HOMEWORK PROBLEMS 16-1 Balance Sheet and Income Statement The Wrangle Company had the following items on its December 31, 20X0, balance sheet and 20X0 incom except for number of shares outstanding Cash and equivalents $ 56,000 Revenues 699,000 Notes payable 45,000 Long-term debt, excluding current portion 199,000 Accounts receivable, net 48,000 Provision for income taxes 62,000 Other long-term assets 105,000 Total Shareholder Equity Interest expense 62,000 Deferred income tax liability-long-term 47,000 Retained earnings 201,000 Income taxes payable 35,000 Cost of sales 460,000 Inventories 39,000 Prepaid expenses 15,000 Common stock (50,000 shares outstanding) 30,000 Property, plant, and equipment, at cost 575,000 Accounts payable 45,000 Interest income 18.000 Goodwill, patents, and trademarks 80,000 Current portion of long-term debt 19,000 Less: Accumulated depreciation 170.000 Selling and administrative expenses 150,000 Additional paid-in capital 1. Prepare in proper form the December 31, 20xo, balance sheet and the 20X0 income statement for Wrang Calculate the amount for shareholder equity and additional paid in capital.

Answer 1

$699,000 $460,000 $239,000 WRANGLE COMPANY Multi-Step Income Statement For the year ended 12/31/20x0 Revenues Cost of Sales Gross Profit Operating Expenses: Selling and Administrative Expenses Operating Income Other Revenues & Expenses: Interest Income $18,000 Interest Expense $62,000 Income Before Income Taxes Income Tax Expense Net Income (Loss) $150,000 $89,000 $44,000 $45,000 $62,000 (=Provision for income taxes) ($17,000)

Assets Current Assets: Cash and equivalents Accounts Receivable, net Inventories Prepaid Expenses Total Current Assets $56,000 $48,000 $39,000 $15,000 $45,000 $35,000 $45,000 $19,000 $144,000 WRANGLE COMPANY Classified Balance Sheet 12/31/20x0 Liabilities & Shareholders' Equity Current Liabilities: Accounts Payable Income Taxes Payable Short-Term Notes Payable Current Portion of Long-Term debt $ 158,000 Total Current Liabilities Long-term Liabilities: Long-term deferred income tax liability Long-term debt $405,000 Total Long-Term Liabilities Total Liabilities Shareholders' Equity: $80,000 Common Stock Additional Paid-in-Capital-Common Retained Earnings $105,000 Total Shareholders' Equity $748,000 Total Liabilities & Shareholders' equity Property, Plant & Equipment: Property, Plant & Equipment at cost Less: Accumulated Depreciation $47,000 $199,000 $575,000 $170,000 $246,000 $390,000 Intangible Assets: Goodwill, Patents and Trademarks $30,000 $127,000 $201,000 [Ref: Workings) Other Assets: Other Long-Term Assets Total Assets $358,000 [Ref: Workings] $748,000

Workings: Total Assets Less: Total Liabilities Total Stockholders' Equity $748,000 $390,000 $358,000 Therefore, Total Stockholders' Equity Less: Common Stock Less: Retained Earnings Additional Paid-in-capital $358,000 $30,000 $201,000 $127,000