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P1-1 (Algo) Preparing an Income Statement, Statement of Stockholders' Equity, and Balance Sheet LO1-1

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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	$ 24,800
Receivables from customers (all considered collectible)	11,100
Inventory of merchandise (based on physical count and priced at cost)	71,000
Equipment owned, at cost less used portion	42,600
Accounts payable owed to suppliers	48,040
Salary payable (on December 31, this was owed to an employee who will be paid on January 10)	3,200
Total sales revenue	123,000
Expenses, including the cost of the merchandise sold (excluding income taxes)	85,200
Income tax expense at 30% pretax income; all paid during the current year	?
Common stock (December 31)	81,900
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.)

2. Prepare a statement of stockholders equity for the year.

Common Stock Retained Earnings

Balance January 1, Current year

Balance December 31, Current year