FINANCIAL ACCOUNTING - Eighth Edition

Solutions Manual

E3-26A
(20-30 min.)
Learning Objective 4: Preparing the financial statements
The adjusted trial balance of Delicious Hams, Inc., follows.
Delicious Hams, Inc.
Adjusted Trial Balance
31-Dec-10
(Amounts in thousands)
Account
Cash............................................................................................
Accounts receivable..................................................................
Inventories .................................................................................
Prepaid expenses ....................................................................
Property, plant and equipment ................................................
Accumulated depreciation .......................................................
Other assets...............................................................................
Accounts payable .....................................................................
Income tax payable ..................................................................
Other liabilities .........................................................................
Common stock..........................................................................
Retained earnings (beginning, December 31, 2009)............
Dividends...................................................................................
Sales revenue ...........................................................................
Cost of goods sold....................................................................
Selling, administrative, and general expenses.......................
Income tax expense ..................................................................
Total ............................................................................................

Adjusted Trial Balance

Debit
Credit
$ 3,800
1,500
1,100
1,700
6,500
$ 2,300
9,300
7,600
600
2,200
4,700
4,700
1,500
41,400
25,100
10,700
2,300
$ 63,500

$ 63,500

Requirement
1. Prepare Delicious Hams, Inc.s income statement and statement of retained
earnings for the year ended December 31, 2010, and its balance sheet on that
date.

Chapter 3: Accrual Accounting and Income

Page 1 of 2

FINANCIAL ACCOUNTING - Eighth Edition

Solutions Manual

Solution:
Delicious Hams, Inc.
Income Statement
Year Ended December 31, 2010
Thousands

Delicious Hams, Inc.

Balance Sheet
December 31, 2010
Thousands

Chapter 3: Accrual Accounting and Income

Page 2 of 2