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Cash Receivables from customers (all considered collectible) Inventory of merchandise (based on physical count and priced at cost) Equipment owned, at cost less used portion Accounts payable owed to suppliers Salary payable (on December 31, this was owed to an employee who will be paid on January 10) Total sales revenue $ 25,000 11, 200 75,000 41,900 47,540 1,800 Required: 1. Prepare a summarized income statement for the year. 135,000 88,200 ? 81,600 10,600 Expenses, including the cost of the merchandise sold (excluding income taxes) Income tax expense at 30% x pretax income; all paid during the current year Common stock (December 31) Dividends declared and paid during the current year (Note: The beginning balances in Common stock and Retained earnings are zero because it is the first year of operations.)

Cash Receivables from customers (all considered collectible) Inventory of merchandise (based on physical count and priced at cost) Equipment owned, at cost less used portion Accounts payable owed to suppliers Salary payable (on December 31, this was owed to an employee who will be paid on January 10) Total sales revenue $ 25,000 11, 200 75,000 41,900 47,540 1,800 Required: 1. Prepare a summarized income statement for the year. 135,000 88,200 ? 81,600 10,600 Expenses, including the cost of the merchandise sold (excluding income taxes) Income tax expense at 30% x pretax income; all paid during the current year Common stock (December 31) Dividends declared and paid during the current year (Note: The beginning balances in Common stock and Retained earnings are zero because it is the first year of operations.)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Assume that you are the president of Highlight Construction Company. At the end of the first year of operations (December 31), the following financial data for the company are available: Cash Receivables from customers (all considered collectible) Inventory of merchandise (based on physical count and priced at cost) Equipment owned, at cost less used portion Accounts payable owed to suppliers Salary payable (on December 31, this was owed to an employee who will be paid on January 10) Total sales revenue Expenses, including the cost of the merchandise sold (excluding income taxes) Income tax expense at 30% x pretax income; all paid during the current year Common stock (December 31) Dividends declared and paid during the current year (Note: The beginning balances in Common stock and Retained earnings are zero because it is the first year of operations.) Required: 1. Prepare a summarized income statement for the year. Answer is complete but not entirely correct. HIGHLIGHT CONSTRUCTION COMPANY Income Statement For the Year Ended December 31, Current Year Total sales revenue $ 135,000 Total expenses 88,200 Pretax income Income tax expense Net income ✓ ✓ $ 0x 0 $ 25,000 11, 200 75,000 41,900 47,540 1,800 135,000 88, 200 ? 0x 81,600 10,600
Transcribed Image Text:Assume that you are the president of Highlight Construction Company. At the end of the first year of operations (December 31), the following financial data for the company are available: Cash Receivables from customers (all considered collectible) Inventory of merchandise (based on physical count and priced at cost) Equipment owned, at cost less used portion Accounts payable owed to suppliers Salary payable (on December 31, this was owed to an employee who will be paid on January 10) Total sales revenue Expenses, including the cost of the merchandise sold (excluding income taxes) Income tax expense at 30% x pretax income; all paid during the current year Common stock (December 31) Dividends declared and paid during the current year (Note: The beginning balances in Common stock and Retained earnings are zero because it is the first year of operations.) Required: 1. Prepare a summarized income statement for the year. Answer is complete but not entirely correct. HIGHLIGHT CONSTRUCTION COMPANY Income Statement For the Year Ended December 31, Current Year Total sales revenue $ 135,000 Total expenses 88,200 Pretax income Income tax expense Net income ✓ ✓ $ 0x 0 $ 25,000 11, 200 75,000 41,900 47,540 1,800 135,000 88, 200 ? 0x 81,600 10,600
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