Question

Carr Company has the following ledger accounts and adjusted balances as of December 31, 2019. All...

Carr Company has the following ledger accounts and adjusted balances as of December 31, 2019. All accounts have normal balances. Carr’s income tax rate is 20%. Carr has 300,000 shares of Common Stock authorized, 100,000 shares of Common Stock issued, and 95,000 shares of Common Stock outstanding.

         Accounts Payable…………………………….   58,500

         Accounts Receivable………………………… 405,000

         Accumulated Depreciation-Building………… 112,500

         Accumulated Depreciation-Equipment………. 90,000

         Administrative Expenses…………………….    90,000

         Allowance for Doubtful Accounts……………   45,000

         Bonds Payable……………………………….. 400,000

         Building……………………………………..1,125,000

         Cash………………………………………….   58,500

         Common Stock……………………………… 600,000

         Cost of Goods Sold…………………………. 855,000

         Discount on Bonds Payable…………………    10,000

         Dividends……………………………………   30,000

         Equipment…………………………………… 435,000

         Income from Operations of Division X……..    90,000

         (Division X is a component of Carr Company)

         Interest Revenue……………………………..   60,000

         Inventory……………………………………...630,000

         Land (held for future use)...…………………. 450,000

         Land (used for building)…………………….. 247,500

         Loss from Sale of Division X...........................180,000

         (Division X is a component of Carr Company)

         Loss on Sale of Investments.……………….. .. 22,500

         Mortgage Payable …………..………………. 562,500*

         Paid-In Capital in Excess of Par……………...396,000

         Prepaid Rent…………………………………. 22,500**

         Retained Earnings, January 1, 2019………… 562,500

         Sales Discounts………………………………. 45,000

         Sales Returns and Allowances……………….. 75,000

         Sales Revenue……………………………...2,302,500

         Selling Expenses……………………………. 292,500

         Trademark…………………………………… 67,500

         Treasury Stock………………………………. 60,000

*$40,000 of the principal comes due in 2019.

**Two years rent on offsite document storage paid in advance.

Instructions:

Use this information to prepare a multiple-step income statement, a retained earnings statement, and a classified balance sheet.

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