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Preparing an Income Statement, Statement of Retained Earnings, and Balance Sheet and Interpreting the Financial Statements [LO 1-2, LO 1-3]

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Assume you are the president of High Power Corporation. At the end of the first year of operations (December 31), the following financial data for the company are available:

Accounts Payable	$	33,100
Accounts Receivable		11,050
Cash		14,300
Common Stock		60,090
Dividends		2,050
Equipment		89,000
Notes Payable		1,760
Operating Expenses		59,400
Other Expenses		7,950
Sales Revenue		94,800
Supplies		6,000
1. Prepare an income statement for the year ended December 31 HIGH POWER CORPORATION Income Statement Revenues Sales Revenue

Answer 1

1.income statement:

Revenues
sales revenue	94,800
	94,800
Expenses:
operating expenses	59,400
other expenses	7,950
total expenses	67,350
net income	27,450

2.statement of retained earnings:

retained earnings january 1	0
net income	27,450
less:dividends	(2,050)
retained earnings december 31	25,400

3.balance sheet.

assets:
cash	14,300
accounts receivable	11,050
supplies	6,000
equipment	89,000
total assets	120,350
liabilities
accounts payable	33,100
notes payable	1,760
total liabilities	34,860
stockholder's equity
contributed capital	60,090
retained earnings	25,400
total stock holders equity	85,490
total liabilities and stock holders equity	120,350