Prepare a Schedule of Cost of Goods Sold and a multi-step Income Statement using the information:

Accounts Balance as of 12/31/01

Cash 66,300
Accounts Receivable 2,450
Building 450,250
Accumulated Depreciation 200,000
Inventory 185,700
Supplies 5,200
Contributed Capital 300,000
Distributions 40,000
Purchases 736,200
Salaries Expense 76,400
Inventory(Jan. 1) 171,000
Operating Expense 110,100
Salaries payable 2,600
Retained Earnings 211,100
Freight-In 3,500
Sales 972,400
Accounts Payable 15,300
Depreciation Expense 40,000

What is cost of goods sold for the year?
What is the amount of goods available of sale?
What amount of inventory will be shown on the year-end balance in retained earnings?
After the tempory accounts are closed, what is the balance retained earnings?
What are total assets?
What are total liabilities?
Write the accounting equation, filling in the appropriate amounts. Does it balance?

Goods Available for sale:
Jan 1 Inventory of $171,000
Add Purhases of $736,200
Add Freight-In of $3,500
Equals Goods available for Sale of $910,700
Less: Dec 31 Inventory of $185,700
Equals Cost of Goods Sold of $725,000

Inventory does not belong on Retained Earnings Statement

Sales of $972,400
Less: COGS of $725,000
Equals Gross Profit on Sales of $247,400
Less:
Operating Expense of $110,100
Salaries Expense of $76,400
Depreciation Expense of $40,000
Equals Income from Operations of $20,900

Retained Earnings on Jan 1 is $211,100
Add: net Income of $20,900
Less: Dividends of $40,000
Equals Retained Earnings on Dec 31 of $192,000

Assets:
Cash of $66,300
Accounts Receivable of $2,450
Building of $450,250
Less: Accumulated Depreciation of $200,000
Inventory of $185,700
Supplies of $5,200
Total Assets equal $509,900

Liabilities:
Salaries Payable of $2,600
Accounts Payable of $15,300
Total Liabilities equal $17,900

Owners Equity:
Capital of $300,00
Retained Earnings of $192,000
Total Owners Equity equals $492,000

Total Liabilities and Owners Equity equals $509,900