Financial Accounting
9th Edition
ISBN: 9781259222139
Author: Robert Libby, Patricia Libby, Frank Hodge Ch
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 1, Problem 1.1P
Preparing an Income Statement, Statement of Stockholders’ Equity, and
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 | $ 25,600 |
| Receivables from customers (all considered collectible) | 10,800 |
| Inventory of merchandise (based on physical count and priced at cost) | 81,000 |
| Equipment owned, at cost less used portion | 42,000 |
| Accounts payable owed to suppliers | 46,140 |
| Salary payable (on December 31, this was owed to an employee who will be paid on January 10) | 2,520 |
| Total sales revenue | 128,400 |
| Expenses, including the cost of the merchandise sold (excluding income taxes) | 80,200 |
| Income taxes expense at 30% × Pretax income: all paid during the current year | ? |
| Common stock (December 31) | 87,000 |
| Dividends declared and paid during the current year | 10,000 |
(Note: The beginning balances in Common Stock and
Required:
Using the financial statement exhibits in the chapter as models and showing computations:
- 1. Prepare a summarized income statement for the year.
- 2. Prepare a statement of stockholders’ equity for the year.
- 3. Prepare a balance sheet at December 31.
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Prepare an income statement (use multistep format) and balance sheet for each fiscal year. (Hint: Record the transaction data for each
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Complete this question by entering your answers in the tabs below.
Balance
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Cash
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Simon Company’s year-end balance sheets follow.
At December 31
Current Yr
1 Yr Ago
2 Yrs Ago
Assets
Cash
$
31,800
$
35,625
$
37,800
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89,500
62,500
50,200
Merchandise inventory
112,500
82,500
54,000
Prepaid expenses
10,700
9,375
5,000
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278,500
255,000
230,500
Total assets
$
523,000
$
445,000
$
377,500
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$
129,900
$
75,250
$
51,250
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98,500
101,500
83,500
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163,500
163,500
163,500
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131,100
104,750
79,250
Total liabilities and equity
$
523,000
$
445,000
$
377,500
The company’s income statements for the current year and one year ago follow. Assume that all sales are on credit:
For Year Ended December 31
Current Yr…
Chapter 1 Solutions
Financial Accounting
Ch. 1 - Define accounting.Ch. 1 - Briefly distinguish financial accounting from...Ch. 1 - Prob. 3QCh. 1 - Prob. 4QCh. 1 - Prob. 5QCh. 1 - Complete the following: Name of Statement...Ch. 1 - What information should be included in the heading...Ch. 1 - What are the purposes of (a) the income statement,...Ch. 1 - Explain why the income statement and the statement...Ch. 1 - Prob. 10Q
Ch. 1 - Prob. 11QCh. 1 - Explain the equation for the income statement....Ch. 1 - Explain the equation for the balance sheet. Define...Ch. 1 - Explain the equation for the statement of cash...Ch. 1 - Explain the equation for retained earnings....Ch. 1 - The financial statements discussed in this chapter...Ch. 1 - Prob. 17QCh. 1 - Prob. 18QCh. 1 - (Supplement A) Briefly differentiate between a...Ch. 1 - Prob. 20QCh. 1 - Which of the following is not one of the four...Ch. 1 - Prob. 2MCQCh. 1 - Prob. 3MCQCh. 1 - Which of the following regarding retained earnings...Ch. 1 - Which of the following is not one of the four...Ch. 1 - Prob. 6MCQCh. 1 - Prob. 7MCQCh. 1 - Which of the following is true regarding the...Ch. 1 - Prob. 9MCQCh. 1 - Prob. 10MCQCh. 1 - Matching Elements with Financial Statements M1-1...Ch. 1 - Matching Financial Statement Items to Financial...Ch. 1 - Prob. 1.3MECh. 1 - Prob. 1.1ECh. 1 - Matching Financial Statement Items to Financial...Ch. 1 - Matching Financial Statement Items to Financial...Ch. 1 - Preparing a Balance Sheet Honda Motor Corporation...Ch. 1 - Completing a Balance Sheet and Inferring Net...Ch. 1 - Prob. 1.6ECh. 1 - Preparing an Income Statement and Inferring...Ch. 1 - Prob. 1.8ECh. 1 - Inferring Values Using the Income Statement and...Ch. 1 - Inferring Values Using the Income Statement and...Ch. 1 - Preparing an Income Statement and Balance Sheet...Ch. 1 - Preparing an Income Statement and Balance Sheet...Ch. 1 - Preparing a Statement of Stockholders Equity...Ch. 1 - Focus on Cash Flows: Matching Cash Flow Statement...Ch. 1 - Preparing an Income Statement, Statement of...Ch. 1 - Analyzing a Student's Business and Preparing an...Ch. 1 - Comparing Income with Cash Flow (Challenging)...Ch. 1 - Evaluating Data to Support a Loan Application...Ch. 1 - Preparing an Income Statement, Statement of...Ch. 1 - Analyzing a Students Business and Preparing an...Ch. 1 - Prob. 1.3APCh. 1 - Prob. 1.1CONCh. 1 - Finding Financial Information LO1-1 Refer to the...Ch. 1 - Prob. 1.2CPCh. 1 - Comparing Companies within an Industry Refer to...Ch. 1 - Using Financial Reports: Identifying and...Ch. 1 - Prob. 1.5CPCh. 1 - Prob. 1.6CPCh. 1 - Prob. 1.7CP
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