3 Exercise 3-8 Preparing Financial Statements from a Trial Balance LO P6
Following are the accounts and balances (in random order) from the adjusted trial balance of Stark Company,
66
Dints
$ 33,000
7,600
3,100
820
eBook
Hint
1,700
Notes payable
Prepaid insurance
Interest expense
Accounts payable
Wages payable
Cash
Wages expense
Insurance expense
Common stock
Retained earnings
Services revenue
$ 29,000
4,300
860
10,500
2,200
9,300
3,600
24,400
108,400
110,000
Accumulated depreciation-Buildings
Accounts receivable
Utilities expense
Interest payable
Unearned revenue
Supplies expense
Buildings
Dividends
Depreciation expense-Buildings
Supplies
46,000
Print
560
220,000
12,000
11,000
1,700
References
Prepare the (1) Income statement and (2) statement of retained earnings for the year ended December 31 and (3) balance she
December 31. The Retained Earnings account balance was $108,400 on December 31 of the prior year.
Complete this question by entering your answers in the tabs below.
Income
Statement
Statement of
Retained
Earnings
Balance Sheet

Blue computers, a major pc manufacturer in the united states, currently has plants in kentucky and pennsylvania. the kentucky plant has a capacity of 1 million units a year and the pennsylvania plant has a capacity of 1.5 million units a year. the firm divides the united states into five markets: northeast, southeast, midwest, south, and west. each pc sells for $1,000. the firm anticipates a 50 perc~nt growth in demand (in each region) this year (after which demand will stabilize) and wants to build a plant with a capacity of 1.5 million units per year to accommodate the growth. potential sites being considered are in north carolina and california. currently the firm pays federal, state, and local taxes on the income from each plant. federal taxes are 20 percent of income, and all state and local taxes are 7 percent of income in each state. north carolina has offered to reduce taxes for the next 10 years from 7 percent to 2 percent. blue computers would like to take the tax break into consideration when planning its network. consider income over the next 10 years in your analysis. assume that all costs remain unchanged over the 10 years. use a discount factor of 0.1 for your analysis. annual fixed costs, production and shipping costs per unit, and current regional demand (before the 50 percent growth) are shown in table 5-13. (a) if blue computers sets an objective of minimizing total fixed and variable costs, where should they build the new plant? how should the network be structured? (b) if blue computers sets an objective of maximizing after-tax profits, where should they build the new plant? how should the network be structured? variable production and shipping cost ($/unit) annual fixed cost northeast southeast midwest south west (million$) kentucky 185 180 175 175 200 150 pennsylvania 170 190 180 200 220 200 n. carolina 180 180 185 185 215 150 california 220 220 195 195 175 150 demand ('000 units/month) 700 400 400 300 600