Com Prob 3 
COMPREHENSIVE PROBLEM 3
SPRINGDALE RETAIL, INC.
a.
Springdale Retail, Inc.
Income Statement
For the Year Ended December 31, 2015
Sales
Less: Sales returns and allowances
Net Sales
Cost of goods sold
Gross profit
Operating expenses:
Salaries
Rent Expense
Utilities expense
Depreciation expense: office equipment
Insurance expense
Office supplies expense
Income before income taxes
Income tax expense
Net income
$
$
88,095
6,100
4,120
2,750
900
520
$
$
226,000
2,500
223,500
100,575
122,925
102,485
20,440
8,190
12,250
b.
Springdale Retail, Inc.
Statement of Retained Earnings
For the Year Ending December 31, 2015
Retained earnings, January 1, 2015
Add: Net income (from income statement)
$
$
Deduct: Dividends declared
Ending Retained earnings, December 31, 2015
$
21,050
12,250
33,300
5,000
28,300
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
COMPREHENSIVE PROBLEM 3
SPRINGDALE RETAIL, INC.
(continued)
c.
Springdale Retail, Inc.
Statement of Financial Position
As of December 31, 2015
ASSETS
Current assets:
Cash
Accounts receivable
Merchandise inventory
Office supplies
Prepaid rent
Total current assets
Non-current Assets
Office equipment
Less: Accumulated depreciation
Land
$
$
$
41,000
12,000
Total Assets
LIABILITIES
Current liabilities:
Accounts payable
Notes payable
Sales taxes payable
Total current liabilities
Non-current liabilities:
Bonds payable
Premium on bonds payable
Deferred income taxes
Total Liabilities
STOCKHOLDERS' EQUITY
Preferred stock, $20 par value, 250 shares issued and outstanding Common Stock, $10 par value, 1,800 shares issued
Additional paid-in capital (common stock)
Retained earnings
Less: Treasury stock (200 common shares at cost)
Total Stockholders' Equity
Total Liabilities and Stockholders' Equity
$
15,200
2,600
17,500
900
1,800
38,000
29,000
37,500
$
104,500
$
$
12,750
2,500
3,200
18,450
$
24,250
5,750
48,450
$
5,000
SPRINGDALE RETAIL, INC.
a.
Springdale Retail, Inc.
Income Statement
For the Year Ended December 31, 2015
Sales
Less: Sales returns and allowances
Net Sales
Cost of goods sold
Gross profit
Operating expenses:
Salaries
Rent Expense
Utilities expense
Depreciation expense: office equipment
Insurance expense
Office supplies expense
Income before income taxes
Income tax expense
Net income
$
$
88,095
6,100
4,120
2,750
900
520
$
$
226,000
2,500
223,500
100,575
122,925
102,485
20,440
8,190
12,250
b.
Springdale Retail, Inc.
Statement of Retained Earnings
For the Year Ending December 31, 2015
Retained earnings, January 1, 2015
Add: Net income (from income statement)
$
$
Deduct: Dividends declared
Ending Retained earnings, December 31, 2015
$
21,050
12,250
33,300
5,000
28,300
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
COMPREHENSIVE PROBLEM 3
SPRINGDALE RETAIL, INC.
(continued)
c.
Springdale Retail, Inc.
Statement of Financial Position
As of December 31, 2015
ASSETS
Current assets:
Cash
Accounts receivable
Merchandise inventory
Office supplies
Prepaid rent
Total current assets
Non-current Assets
Office equipment
Less: Accumulated depreciation
Land
$
$
$
41,000
12,000
Total Assets
LIABILITIES
Current liabilities:
Accounts payable
Notes payable
Sales taxes payable
Total current liabilities
Non-current liabilities:
Bonds payable
Premium on bonds payable
Deferred income taxes
Total Liabilities
STOCKHOLDERS' EQUITY
Preferred stock, $20 par value, 250 shares issued and outstanding Common Stock, $10 par value, 1,800 shares issued
Additional paid-in capital (common stock)
Retained earnings
Less: Treasury stock (200 common shares at cost)
Total Stockholders' Equity
Total Liabilities and Stockholders' Equity
$
15,200
2,600
17,500
900
1,800
38,000
29,000
37,500
$
104,500
$
$
12,750
2,500
3,200
18,450
$
24,250
5,750
48,450
$
5,000