In its closing financial statements for its first year in business, ABC Enterpri
ID: 2777254 • Letter: I
Question
In its closing financial statements for its first year in business, ABC Enterprises, had cash of $242, accounts receivable of $850, inventory of $820, net fixed assets of $3,408, accounts payable of $700, short-term notes payable of $740, long-term liabilities of $1,100, common stock of $1,160, retained earnings of $1,620, net sales of $2,768, cost of goods sold of $1,210, depreciation of $360, interest expense of $160, taxes of $312, addition to retained earnings of $508, and dividends paid of $218. In addition you calculated a number of ratios. Using the information provided and the ratios you calculated create the company's income statement and balance sheet.
Explanation / Answer
Balance sheet of ABC Enterprises would be as follows
Income Statement would be as follows
Since the dividend paid for the year is 218, Dividend payout ratio is 218 / 726 = 30%
Assets Liabilities Current Assets Current Liabilities Cash 242 A/P 700 A/R 850 ST Notes Payable 740 Inventory 820 Other Liabilities Other Assets LT Liabilities 1100 Net Fixed Assets 3408 Equity Common Stock 1160 Retained Earnings 1620 Total Assets 5320 Total Liabilities 5320