Question
Kamm Corporation began operations at the start of 2022 and uses accrual accounting. During the year, it made cash and credit sales totaling $500,000 but
Kamm Corporation began operations at the start of 2022 and uses accrual accounting.
During the year, it made cash and credit sales totaling $500,000 but only collected $420,000 from its customers.
Kamm purchased inventory costing $250,000.
The cost of goods sold was $210,000.
Kamm also incurred the following expenses: Salary Expense $80,000
Interest Expense 5,000
Insurance Expense 4,000 Supplies Expense 6,000 Income Tax Expense 34,000
Kamm paid $15,000 in dividends during the year.
#1 Requirement a:
Prepare an income statement, in good format (see text for example), for Kamm. Be sure to show the following line items: Revenues, Expenses, Income before Income Taxes, Income Tax Expense, and Net Income for the year ended December 31, 2022.
#1 Requirement b:
Based on the above information, what is the amount of Accounts Receivable on the Balance Sheet.
#1 Requirement c:
Based on the above information, what is the amount of Retained Earnings on the Balance Sheet.
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