P2.18 - Garys TV had the following accounts and amounts

in its financial statements on December 31, 2013. Assume that all balance sheet items

reflect account balances at December 31, 2013, and that all income statement items

reflect activities that occurred during the year then ended.

Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Accumulated depreciation. . . . . . . . . . . . . . . . . . . . .

Notes payable (long-term) . . . . . . . . . . . . . . . . . . . . .

Rent expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Merchandise inventory . . . . . . . . . . . . . . . . . . . . . . .

Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . .

Depreciation expense . . . . . . . . . . . . . . . . . . . . . . . .

Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . .

Equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . .

Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . .

Sales revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 18,000

40,000

12,000

140,000

36,000

420,000

96,000

6,000

64,000

450,000

72,000

880,000

36,000

120,000

46,000

1,240,000

Required:

a. Calculate the difference between current assets and current liabilities for Garys

TV at December 31, 2013.

b. Calculate the total assets at December 31, 2013.

c. Calculate the earnings from operations (operating income) for the year ended

December 31, 2013.

d. Calculate the net income (or loss) for the year ended December 31, 2013.

e. What was the average income tax rate for Garys TV for 2013?

f. If $128,000 of dividends had been declared and paid during the year, what was

the January 1, 2013, balance of retained earnings?

Please Fill out the table below

P2.18.
a.
Merchandise inventory
Accounts receivable
Cash
Total current assets
Less: Accounts payable *
Current assets less current liabilities
* No other current liabilities are included in the problem.
b.
Total current assets
Land
Equipment
Accumulated depreciation
Total assets
c.
Sales revenue
Cost of goods sold
Gross profit
Rent expense
Depreciation expense
Earnings from operations (operating income)
d.
Earnings from operations (operating income)
Interest expense
Earnings before taxes
Income tax expense
Net income
e.
Average tax rate
f.
Retained earnings, January 1, 2013
Net income for the year
Dividends declared and paid during the year
Retained earnings, December 31, 2013