Question

M Inbox (1) Ch 1 HW 12.500 31, this was owed to an employee who will be paid on Jauary 10) 131000 85.200 Salary (on 84100 31) of

Answer 1

Solution :

Highlight Construction Company
Income statement
For the year
Particulars	Amount
Total sales revenue	$131,000.00
Expenses	$85,200.00
Pretax income	$45,800.00
Income tax expense (30%)	$13,740.00
Net Income	$32,060.00

Highlight Construction Company
Statement of stockholder's Equity
Particulars	Common Stock	Retained Earnings
Balance, Jan 1 current year	$0.00	$0.00
Add: Issue of shares	$84,100.00	$0.00
Add: Net Income	$0.00	$32,060.00
Less: Dividend paid	$0.00	$10,800.00
Balances, Dec 31, current year	$84,100.00	$21,260.00

Highlight Construction Company
Balance Sheet
Particulars		Amount
Assets:
Cash		$24,900.00
Receivables from customer		$12,500.00
Inventory of merchandise		$76,000.00
Equipment		$41,600.00
Total Assets		$155,000.00
Liabilities and stockholder's equity:
Liabilities:
Accounts payable	$47,640.00
Salary Payable	$2,000.00
Total liabilities		$49,640.00
Stockholder's Equity:
Common stock	$84,100.00
Retained Earnings	$21,260.00
Total Stockholder's Equity		$105,360.00
Total Liabilities and stockholder's equity		$155,000.00

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