Chapter 1, Problem 1.1CP

Preparing an Income Statement. Statement of Retained Earnings, and Balance Sheet

Assume that you are the president of Nuclear Company. At the end of the first year of operations (December 31), the following financial data for the company are available:

Accounts Payable	$30,000
Accounts Receivable	59,500
Cash	12,000
Common Stock	62,280
Dividends	200
Equipment	36,000
Notes Payable	1,470
Operating Expenses	57,200
Other Expenses	8,850
Sales Revenue	88,000
Supplies	8,000

Required:

1. 1. Prepare an income statement for the year ended December 31.

   TIP: Begin by classifying each account as asset, liability, stockholders’ equity, revenue, or expense. Each account is reported on only one financial statement.

2. 2. Prepare a statement of retained earnings for the year ended December 31.

   TIP: Because this is the first year of operations, the beginning balance in Retained Earnings will be zero.

3. 3. Prepare a balance sheet at December 31.

   TIP: The balance sheet includes the ending balance from the statement of retained earnings.