Question

P1-1 Preparing an Income Statement, Statement of "Stockholders" Equity, and Balance Sheet LO1-1 The following information applies to the questions displayed below Assume that you are the president of Highlight Construction Company. At the end of the first year of operations (December 3t, the following financial deta for the company are avalilable: Cash Recelvabies from customers (al considered colectible) nventory of merchandise (oased on physical count and priced at cost Equipment owned, at cost less used portion Accounts payable owed to suppliers Salary payable (on December 31, this was owed to an employee who will be paid on January 10 Total sales revenue Expenses, including the cost of the merchandse sold lexcluding income taxes) income taxes expense at 30% pretax income, al pad dring the current year Common stock (December 3t Dvidends declared and paid during the current year s 24700 0,900 4000 41,600 47,840 ,100 117000 81200 85,700 0,500 Note: The beginning balances in Common stock and Retained eamings are zero because it is the first yeer of operations)

Answer 1

6. INCOME STATEMENT
	Total sales revenue	117000
Less	Expense including COGS	81200
	Income before tax	35,800
Less	Income tax expense	10,740	(35800*30%)
	Net income	25,060
7.Statement of stockholders equity.		Common stock	Retained earnings
	Balance Jan 1 current year	0	0
	Common stock	85,700
	Net income		25,060
	Dividend		-10500
	Balance dec 31 current year	85,700	14,560