Extra Credit Homework                                         

You are thinking of investing in one of two corporations, both in the same industry, the Bill Gate Corporation. Selected data follows:

Sales and expense data for the year ended 12/31/16:

Gross revenue $41,285,000; Returns $1,710,000

Selling expenses:

Payroll $3,342,000; benefits $1,050,000, travel $350,200; supplies $450,150, commissions $520,300, marketing $810,000, postage $210,300, misc $41,500.

Administrative expenses:

Distribution $1,428,000, warehouse $959,000, IT $625,200, finance $529,400, human resources $413,250; administrative $310,000, depreciation $122,000

Other Gains and Losses

Sale of machine with a book value of $27,500 for $4,000 cash.

          : Loss due to flood damage of $422,000.

Irregular Items:

None.

In addition, Bill Gate Corporation discovered an inventory error from 2015 which had the effect of overstating income for 2015 by $65,000 before tax.

Tax rates: 35%

Outstanding shares of common stock:

2,000,000 $1PV shares authorized, 800,000 shares issued and outstanding.

Dividends: both companies paid cash dividends of $1.50 per share.

Selected Balance Sheet Information:

Cash $1,822,000

marketable securities (at cost $410,300, at fair value $495,400)

Account receivable (gross $1,725,400 less allowance for doubtful accounts of $112,100)

Finished goods inventory, opening balance $189,400, purchases $12,443,400, ending balance $175,610

Prepaid expenses $40,210

Plant assets at cost $21,400,000, accumulated depreciation $7,312,000.

Accounts payable, $613,410

accrued expense payable $191,260

bonds payable $4,814,693

capital stock $1,450,000

beginning retained earnings $2,325,250.

1) Prepare a statement of Retained Earning

2) Prepare Income Statement including EPS

3) Prepare multiple step Balance Sheet.Capital Stock must be broken down between common stock and additional paid in capital.