Question

The trial balance of Tolmie Inc. for the year ended September 30, 2021, prior to recording of tax expenses, but after all other adjustments, follows below. All accounts are represented by their normal balance (debit or credit). Tolmie has a tax rate of 30%.

Accounts payable................................................................................. $ 80,000

Accounts receivable ............................................................................. 40,000

Cash..................................................................................................... 50,000

Cash dividends..................................................................................... 7,000

Common shares................................................................................... 30,000

Cost of goods sold................................................................................ 175,000

Dividends payable................................................................................ 4,000

Interest expense................................................................................... 4,500

Inventory .............................................................................................. 120,000

Operating expenses ............................................................................. 92,300

Preferred shares .................................................................................. 25,000

Retained earnings, beginning balance ................................................. 11,900

Sales revenue ...................................................................................... 320,000

Taxes payable...................................................................................... 100

Prepare the income statement and statement of retained earnings using good format for Tolmie Inc. for the year ended September 30, 2021.

Answer 1