Question
P1-1 (Algo) Preparing an Income Statement, Statement of Stockholders' Equity, and Balance Sheet LO1-1 [The following information applies to the questions displayed below.] Assume that
P1-1 (Algo) Preparing an Income Statement, Statement of Stockholders' Equity, and Balance Sheet LO1-1
[The following information applies to the questions displayed below.]
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 | $ | 25,100 |
Receivables from customers (all considered collectible) | 12,000 | |
Inventory of merchandise (based on physical count and priced at cost) | 73,000 | |
Equipment owned, at cost less used portion | 41,500 | |
Accounts payable owed to suppliers | 47,340 | |
Salary payable (on December 31, this was owed to an employee who will be paid on January 10) | 3,000 | |
Total sales revenue | 128,000 | |
Expenses, including the cost of the merchandise sold (excluding income taxes) | 87,200 | |
Income tax expense at 30% pretax income; all paid during the current year | ? | |
Common stock (December 31) | 82,800 | |
Dividends declared and paid during the current year | 10,100 | |
(Note: The beginning balances in Common stock and Retained earnings are zero because it is the first year of operations.)
P1-1 Part 1
Required:
1. Prepare a summarized income statement for the year.
HIGHLIGHT CONSTRUCTION COMPANY Income Statement For the Year Ended December 31, Current YearStep by Step Solution
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