P4-2 (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. Thirty thousand shares of common stock are outstanding the entire year.
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