Gary’s TV had the following accounts and amounts in its financial statements on December 31, 2022. Assume that all balance sheet items reflect account balances at December 31, 2022, and that all income statement items reflect activities that occurred during the year then ended. Calculate the difference between current assets and current liabilities for Gary’s TV at December 31, 2022.Calculate the total assets at December 31, 2022.Calculate the earnings from operations (operating income) for the year ended December 31, 2022.Calculate the net income (or loss) for the year ended December 31, 2022.What was the average income tax rate for Gary’s TV for 2022?If $26,000 of dividends had been declared and paid during the year, what was the January 1, 2022, balance of retained earnings? ### Financial Analysis of Gary’s TV for the Year Ended December 31, 2022Gary’s TV had the following accounts and amounts in its financial statements on December 31, 2022. Assume that all balance sheet items reflect account balances at December 31, 2022, and that all income statement items reflect activities that occurred during the year then ended.| Account | Amount ($) ||--------------------------|-------------|| Interest expense | 5,700 || Paid-in capital | 19,600 || Accumulated depreciation | 5,400 || Notes payable (long-term)| 59,400 || Rent expense | 12,600 || Merchandise inventory | 138,900 || Accounts receivable | 46,000 || Depreciation expense | 7,700 || Land | 43,000 || Retained earnings | 158,500 || Cash | 26,700 || Cost of goods sold | 244,000 || Equipment | 34,000 || Income tax expense | 36,800 || Accounts payable | 37,000 || Net sales | 430,000 |#### Required Analyses:a. **Calculate the difference between current assets and current liabilities for Gary’s TV at December 31, 2022.***Current Assets include:* Cash, Accounts Receivable, Merchandise Inventory. *Current Liabilities include:* Accounts Payable.b. **Calculate the total assets at December 31, 2022.***Total Assets include:* Cash, Accounts Receivable, Merchandise Inventory, Land, Equipment.c. **Calculate the earnings from operations (operating income) for the year ended December 31, 2022.***Operating Income calculation:* Net sales - Cost of goods sold - Rent Expense - Depreciation Expense.d. **Calculate the net income (or loss) for the year ended December 31, 2022.***Net Income calculation:* Operating Income - Interest Expense - Income Tax Expense.e. **What was the average income tax rate for Gary’s TV for 2022?***Average Income Tax Rate:* Income Tax Expense / Operating Income.f. **If $26,000 of dividends had been declared and paid

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Answered: Gary’s TV had the following accounts…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Gary’s TV had the following accounts and amounts in its financial statements on December 31, 2022. Assume that all balance sheet items reflect account balances at December 31, 2022, and that all income statement items reflect activities that occurred during the year then ended.

Calculate the difference between current assets and current liabilities for Gary’s TV at December 31, 2022.
Calculate the total assets at December 31, 2022.
Calculate the earnings from operations (operating income) for the year ended December 31, 2022.
Calculate the net income (or loss) for the year ended December 31, 2022.
What was the average income tax rate for Gary’s TV for 2022?
If $26,000 of dividends had been declared and paid during the year, what was the January 1, 2022, balance of retained earnings?

### Financial Analysis of Gary’s TV for the Year Ended December 31, 2022

Gary’s TV had the following accounts and amounts in its financial statements on December 31, 2022. Assume that all balance sheet items reflect account balances at December 31, 2022, and that all income statement items reflect activities that occurred during the year then ended.

| Account | Amount ($) |
|--------------------------|-------------|
| Interest expense | 5,700 |
| Paid-in capital | 19,600 |
| Accumulated depreciation | 5,400 |
| Notes payable (long-term)| 59,400 |
| Rent expense | 12,600 |
| Merchandise inventory | 138,900 |
| Accounts receivable | 46,000 |
| Depreciation expense | 7,700 |
| Land | 43,000 |
| Retained earnings | 158,500 |
| Cash | 26,700 |
| Cost of goods sold | 244,000 |
| Equipment | 34,000 |
| Income tax expense | 36,800 |
| Accounts payable | 37,000 |
| Net sales | 430,000 |

#### Required Analyses:

a. **Calculate the difference between current assets and current liabilities for Gary’s TV at December 31, 2022.**

*Current Assets include:* Cash, Accounts Receivable, Merchandise Inventory.
*Current Liabilities include:* Accounts Payable.

b. **Calculate the total assets at December 31, 2022.**

*Total Assets include:* Cash, Accounts Receivable, Merchandise Inventory, Land, Equipment.

c. **Calculate the earnings from operations (operating income) for the year ended December 31, 2022.**

*Operating Income calculation:* Net sales - Cost of goods sold - Rent Expense - Depreciation Expense.

d. **Calculate the net income (or loss) for the year ended December 31, 2022.**

*Net Income calculation:* Operating Income - Interest Expense - Income Tax Expense.

e. **What was the average income tax rate for Gary’s TV for 2022?**

*Average Income Tax Rate:* Income Tax Expense / Operating Income.

f. **If $26,000 of dividends had been declared and paid

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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Follow up question. Anwser D E F

d. Calculate the net income (or loss) for the year ended December 31, 2022 e. What was the average income tax rate for Gary's TV for 2022? F If $26,000 of dividends had been declared and paid during the year, what was the January 1, 2022, balance of retained earnings?

Gary's TV had the following accounts and amounts in its financial statements on December 31, 2022. Assume that all balance sheet
items reflect account balances at December 31, 2022, and that all income statement items reflect activities that occurred during the
year then ended.
Interest expense
Paid-in capital
Accumulated depreciation
Notes payable (long-term)
Rent expense
Merchandise inventory
Accounts receivable
Depreciation expense
Land
Retained earnings
Cash
Cost of goods sold
Equipment
Income tax expense
Accounts payable
Net sales
$ 5,700
19,600
5,400
59,000
12,600
130,000
46,000
2,780
43,000
158,500
26,500
244,000
34,000
66,000
37,000
430,000
Required:
a. Calculate the difference between current assets and current liabilities for Gary's TV at December 31, 2022.
b. Calculate the total assets at December 31, 2022.
c. Calculate the earnings from operations (operating income) for the year ended December 31, 2022.
d. Calculate the net income (or loss) for the year ended December 31, 2022
e. What was the average income tax rate for Gary's TV for 2022?
1. If $26,000 of dividends had been declared and paid during the year, what was the January 1, 2022, balance of retained earnings?

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