Accounting


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    It is the end of a reporting period. Because there are more people than usual retiring this year, your manager has asked your accounting department to create 2 things:
    • A process documentation detailing the different methods of preparing income statements, specific sections of the income statement, and how to handle the special types of income statement items
    • Basic financial statements for your company
    Individual Portion:
    1. Visit the SEC’s Web site (http://idea.sec.gov/idea/searchidea/companysearch_idea.html).
      • Select a company filing of your choice that contains a multiple-step income statement.
      • Communicate your selection with your group (each of you should submit a different company).
      • Submit the link to this filing as proof of your research.
    2. Prepare a process documentation that
      • is prepared in a professional manner because it will be the desktop guide used by others in the event of your absence to prepare the financial statements for Music Warehouse.
      • is in the form of a memorandum or as a numbered listing of items, depending on your individual preference.
      • includes the following elements:
        • a definition and description of the specific sections of the income statement
        • a description of the different methods of preparing income statements
        • an explanation of the conceptual guidelines for reporting income
        • how to handle the special types of income statement items
    Please add your file.
    Group Portion:
    Using the information below, do the following:
    • Prepare a multiple-step income statement for Music Warehouse.
    • Prepare a statement of changes in stockholder’s equity for Music Warehouse.
    You may work together, or you may assign each group member a different financial statement or part of the assignment to work on.
    Music Warehouse
    Adjusted Trial Balance
    December 31, 2008
     
     
    Debit
    Credit
    Cash
    $24,675
    Accounts Receivable
    5,625
    Inventory
    65,980
    Land
    93,000
    Building
    289,000
    Accumulated Depreciation
    75,000
    Notes Payable
    85,000
    Accounts Payable
    53,600
    Interest Payable
    4,750
    Common Stock
    10,000
    Additional Paid-in Capital
    120,000
    Dividends
    10,000
    Retained Earnings
    59,980
    Sales
    937,500
    Sales Discounts
    22,675
    Cost of Goods Sold
    723,000
    Salaries
    81,000
    Utilities
    8,900
    Repairs & Maintenance
    5,225
    Telephone
    2,850
    Interest Expense
    4,400
    Depreciation Expense
    9,500
       
     
    $1,345,830
    $1,345,830
    The following is additional information needed for financial-statement preparation:

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