Pope's Garage 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. Accounts receivable Depreciation expense Land Cost of goods sold Retained earnings Cash Equipment Supplies Accounts payable Service revenue Interest expense Common stock Income tax expense Accumulated depreciation Long-term debt Supplies expense Merchandise inventory Net sales $ 218,000 72,000 152,000 590,000 370,000 54,000 448,000 36,000 138,000 120,000 24,000 70,000 84,000 270,000 240,000 84,000 180,000 890,000 Required: a. Calculate the total current assets at December 31, 2022. b. Calculate the total liabilities and stockholders' equity at December 31, 2022. c. Calculate the earnings from operations (operating income) for the year ended December 31, 2022.
Pope's Garage 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. Accounts receivable Depreciation expense Land Cost of goods sold Retained earnings Cash Equipment Supplies Accounts payable Service revenue Interest expense Common stock Income tax expense Accumulated depreciation Long-term debt Supplies expense Merchandise inventory Net sales $ 218,000 72,000 152,000 590,000 370,000 54,000 448,000 36,000 138,000 120,000 24,000 70,000 84,000 270,000 240,000 84,000 180,000 890,000 Required: a. Calculate the total current assets at December 31, 2022. b. Calculate the total liabilities and stockholders' equity at December 31, 2022. c. Calculate the earnings from operations (operating income) for the year ended December 31, 2022.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Pope's Garage 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.
Accounts receivable
Depreciation expense
Land
Cost of goods sold
Retained earnings
Cash
Equipment
Supplies
Accounts payable
Service revenue
Interest expense
Common stock
Income tax expense
Accumulated depreciation
Long-term debt
Supplies expense
Merchandise inventory
Net sales
a.
Required:
a. Calculate the total current assets at December 31, 2022.
b. Calculate the total liabilities and stockholders' equity at December 31, 2022.
c. Calculate the earnings from operations (operating income) for the year ended
December 31, 2022.
b.
d. Calculate the net income (or loss) for the year ended December 31, 2022.
e. What was the average income tax rate for Pope's Garage for 2022?
f. If $96,000 of dividends had been declared and paid during the year, what was the
January 1, 2022, balance of retained earnings?
C.
d.
e.
f.
$ 218,000
72,000
152,000
590,000
370,000
54,000
448,000
36,000
138,000
120,000
24,000
70,000
84,000
Total current assets
Total liabilities and Stockholders' equity
Operating income
270,000
240,000
Average income tax rate
Retained earnings
84,000
180,000
890,000
%
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