Pope\'s Garage had the following accounts and amounts in its financial statement
ID: 2492384 • Letter: P
Question
Pope's Garage had the following accounts and amounts in its financial statements on December 31. Assume that all balance sheet items reflect account balances at December 31, 2013, and that all inc statement items reflect activities that occurred during the year then ended. Calculate the total current assets at December 31, 2013. Calculate the total liabilities and stockholder's equity at December 31, 2013. Calculate the earnings from operations (operating income) for the year ended December 31, 201: Calculate the net income (or loss) for the year ended December 31, 2013. What was the average income tax rate for Pope's Garage for 2013? If $17,500 of dividends had been declared and paid during the year, what was the January 1, 201 balance of retained earnings?Explanation / Answer
Pope’s garage had the following accounts and amount in its financial statement
Total current assests at December 31, 2010.=77,900
Accounts receivable……………...$32,600
Cash……………………………..9,900
Supplies……………………...5,600
Merchandise inventory………...29,800
b. Total liabilities and owners’ equity at December 31, 2010=131,200
Retained earnings………………….61,100
Accounts Payable……………...21,100
Common stock………………..10,000
Long-term debt…………….39,000
Earnings from operations (operating income) for the year ended December 31, 2010. =79,100
Sales revenue……..173,000
Service revenue…………20,100
Less:
Cost of goods sold………………89,000
Depreciation expense………..11,500
Supplies expense…………..13,500
d.Calculate the net income ( or loss) for the year ended December 31, 2010
Operating Income
Less:
Interest expense……………..2,200
Income tax expense…………..21,532
e.What was the average income tax rate for Pope’s Garage for 2010?
21,532 / Income before income taxes
f.If $17,500 of dividends had been declared and paid during the year, what was the January 1, 2010, balance of retained earnings?
61,100 - 17,500