The information on the following page was obtained from the records of Breanna Incorporated:

Accounts receivable	$ 10,700
Accumulated depreciation	51,500
Cost of goods sold	124,000
Income tax expense	8,500
Cash	63,500
Net sales	191,000
Equipment	125,000
Selling, general, and administrative expenses	39,000
Common stock (9,100 shares)	94,000
Accounts payable	11,800
Retained earnings, 1/1/22	34,500
Interest expense	5,100
Merchandise inventory	38,800
Long-term debt	39,000
Dividends declared and paid during 2022	7,200

Except as otherwise indicated, assume that all balance sheet items reflect account balances at December 31, 2022, and that all income statement items reflect activities that occurred during the year ended December 31, 2022. There were no changes in paid-in capital during the year.

Required:

Prepare an income statement and statement of changes in stockholders' equity for the year ended December 31, 2022, and a balance sheet at December 31, 2022, for Breanna Incorporated. Based on the financial statements that you have prepared for part a, answer the questions in parts b-e.

What is the company's average income tax rate?

What interest rate is charged on long-term debt? Assume that the year-end balance of long-term debt is representative of the average long-term debt account balance throughout the year.

What is the par value per share of common stock?

What is the company's dividend policy (i.e., what proportion of the company's earnings is used for dividends)?

Prepare a statement of changes in stockholders equity for the year ended December 31, 2022, for Breanna Incorporated. Note: Enter decreases with a minus sign to indicate a negative financial statement effect.

BREANNA INCORPORATED

Statement of Changes in Stockholders Equity

For the Year Ended December 31, 2022

Paid-in capital

Retained earnings

Beginning balance

Ending balance

0

Prepare a balance sheet at December 31, 2022, for Breanna Incorporated. Note: Enter decreases with a minus sign to indicate a negative financial statement effect.

BREANNA INCORPORATED
Balance Sheet
December 31, 2022
Assets
Total current assets		0
Total assets		0
Liabilities
Total liabilities		0
Stockholders Equity
Total stockholders equity		0
Total liabilities and stockholders equity		$0

Req A2

$0