P1-1 LO1-1 Preparing an Income Statement, Statement of Stockholders' Equity, and Balance Sheet (AP1-1) Assume that...

Transcribed Image Text:

P1-1 LO1-1 Preparing an Income Statement, Statement of Stockholders' Equity, and Balance Sheet (AP1-1) 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 Receivables from customers (all considered collectible) Inventory of merchandise (based on physical count and priced at cost) Equipment owned, at cost less used portion Accounts payable owed to suppliers $ 25,600 10,800 81,000 42,000 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) Income tax expense at 30% x Pretax income; all paid during the current year Common stock (December 31) 80,200 Dividends declared and paid during the current year 87,000 10,000 (Note: The beginning balances in Common Stock and Retained Earnings are zero because it is the first year of operations.) 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.. P1-1 LO1-1 Preparing an Income Statement, Statement of Stockholders' Equity, and Balance Sheet (AP1-1) 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 Receivables from customers (all considered collectible) Inventory of merchandise (based on physical count and priced at cost) Equipment owned, at cost less used portion Accounts payable owed to suppliers $ 25,600 10,800 81,000 42,000 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) Income tax expense at 30% x Pretax income; all paid during the current year Common stock (December 31) 80,200 Dividends declared and paid during the current year 87,000 10,000 (Note: The beginning balances in Common Stock and Retained Earnings are zero because it is the first year of operations.) 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..