Question

Prepare Income Statement from following information:

Date	Account Titles	Debit	Credit
2016		$	$
Jan 1	Cash	4,000,000
	Common Stock		50,000
	Paid-in Capital in Excess of Par: Common Stock		3,950,000
Jan 1	Cash	104,000
	Premium on Bonds Payable		4,000
	Bonds Payable		100,000
Jan 1	Equipment 1	50,000
	Cash		50,000
Jan 1	Equipment 2	550,000
	Cash		550,000
Jan 3	Inventory	22,000
	Cash		22,000
Apr 1	Building	900,000
	Cash		900,000
June 1	Equipment 3	100,000
	Cash		100,000
June 1	Inventory	23,000
	Cash		23,000
June 30	Cash	1,750,000
	Common Stock		25,000
	Paid-in Capital in Excess of Par: Common Stock		1,725,000
July 1	Cash	100,000
	Notes Payable		100,000
Oct 1	Salaries Expense	45,000
	Cash		45,000
???	Patents	80,000
	Cash		80,000
Oct 10	Depreciation Expense ( 50,000 / 10 ) * 9 / 12	3,750
	Accumulated Depreciation : Equipment 1		3,750
Oct 10	Cash	40,000
	Accumulated Depreciation : Equipment 1	3,750
	Loss on Sale of Equipment	6,250
	Equipment 1		50,000
Nov 1	Equity Investment	100,000
	Cash		100,000
Dec 1	Inventory	24,000
	Cash		24,000
Dec 20	Cash	120,000
	Accounts Receivable	480,000
	Sales		600,000
Dec 20	Cost of Goods Sold	45,000
	Inventory		45,000
Dec 31	Repairs Expense	5,000
	Cash		5,000
Dec 31	Equipment 3	40,000
	Note Payable		40,000
Dec 31	Dividends	79,500
	Cash		79,500
Dec 31	Cash	2,000
	Dividend Revenue		2,000
Dec 31	Unrealized Holding Loss on Equity Investments	40,000
	Fair Value Adjustment		40,000
Dec 31	Bad Debt Expense ( 480,000 x 10 % )	48,000
	Allowance for Doubtful Accounts		48,000
Dec 31	Depreciation Expense	85,000
	Accumulated Depreciation: Equipment 2		55,000
	Accumulated Depreciation: Building		30,000
Dec 31	Interest Expense	9,600
	Premium on Bonds Payable	400
	Interest Payable		10,000
Dec 31	Salaries Expense	5,000
	Salaries Payable		5,000

Answer 1