Question

prepare income statement and statement changes in stockholders equity

X Ch 2 Sample Solutions X e zto.mheducation.com/hm.tpx?_0.47943422791122525_1583035261536 Watch Free - Watch... Y Yahoo G Google School Resources M Gmail → c Apps M Connect Learning Softwx + Youtube Maps $ Accounts receivable Accumulated depreciation Cost of goods sold Income tax expense Cash Sales Equipment Selling, general, and administrative expenses Common stock (8,700 shares) Accounts payable Retained earnings, 1/1/16 Interest expense Merchandise inventory Long-term debt Dividends declared and paid during 2016 10,600 50.100 128,000 9,000 62,500 195,000 123,000 34,000 96,000 10,500 28,800 5,600 38,500 40,000 9,200 Except as otherwise indicated, assume that all balance sheet items reflect account balances at December 31, 2016, and that all income statement items reflect activities that occurred during the year ended December 31, 2016. There were no changes in paid-in capital during the year. Required: a. Prepare an income statement and statement of changes in stockholders' equity for the year eaded December 31, 2016, and a balance sheet at December 31, 2016, for Breanna, Inc. Based on the financial statements that you have prepared for part a, answer the questions in parts b-e. BREANNA, INC. Income Statement For the Year Ended December 31, 2016 Sales $ Cost of goods sold Gross profit 208,000 127,000 81,000

Answer 1

1) Income Statement :-

Particulars	Amount($)	Amount($)
Sales	195000
Less : Cost of Goods Sold	(128000)
Gross Profit	67000	67000
Less : Operating Expenses
Selling, General and Administrative Exp.		(34000)
Operating Income		33000
Less : Interest Expense		(5600)
Income Before Taxes		27400
Less : income Tax Expenses		(9000)
Net Income		18400

2) Statement of Changes in Stockholder's Equity :-

Particulars	Amount($)
Paid in Capital :-
Beginning Balance	0
Common Stock	96000
Ending Balance (A)	96000
Retained Earnings :-
Beginning Balance	28800
Net Income	18400
Less : Dividends	(9200)
Ending Balance (B)	38000
Total Stockholder's Equity (A+B)	134000