Question

Required information Preparing an Income Statement, Statement of Retained Earnings, and Balance Sheet and Interpreting the Financial Statements (LO 1-2, LO 1-3) The following information applies to the questions displayed below) 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 Accounts Receivable Cash Common Stock Dividends Equipment Notes Payable Operating Expenses other Expenses Sales Revenue Supplies $32,900 10, 750 14,100 59, 890 2,030 87,000 1, 620 59,200 7,930 92,400 5,800

Answer 1

Income Statement Revenue Sales Revenue $ 92,400 $ 92,400 Less Total Revenue Expenses: Operating Expense Other Expenses Total Expense Net Income $ $ $ $ 59,200 7,930 67,130 25,270 Retained Earning Statement Retained earning Beginning Balance Net Income Add $ $ $ $ 25,270 25,270 2,030 23,240 Less Dividend Retained earning Ending Balance Balance sheet For the year ended on Dec 31 Assets Cash Accounts Receivables Supplies Equipment $ $ $ $ 14,100 10,750 5,800 87,000 Total assets $ 117,650 Liabilities Accounts Payable Notes Payable Total Liabilities $ $ $ 32,900 1,620 34,520 Stockholders Equity Common Stock Retained Earning Total Stockholders Equity Add $ $ $ 59,890 23,240 83,130 Total Liabilities & Stockholder's Equity | $ 117,650 Income Statement shows profit or loss made by a company within specific time period. Retained Earning statement shows changes in retained earning in a time period. Balance sheet shows financial position of a company on a given date, it shows assets and liabilities of a company.