Question

Pope's Garage had the following accounts and amounts in its financial statements on December 31, 2019. Assume that all balance sheet items reflect account balances at December 31, 2019, and that all income statement items reflect activities that occurred during the year then ended. Accounts receivable Depreciation expense Land Cost of goods sold Retained earnings Cash Equipment Supplies Accounts payable Service revenue Interest expense Common stock Income tax expense Accumulated depreciation Long-term debt Supplies expense Merchandise inventory Net sales $ 30,000 10,300 26.300 88.000 65,900 10,200 70,000 5,200 20,400 25,800 3.800 8,000 13,986 41,000 36,000 13,900 28,800 142,000

Answer 1

Please give positive ratings so I can keep answering. It would help me a lot. Please comment if you have any query. Thanks!

Pope's Garage
Answer a
Current Assets
Assets	Amount $
Accounts Receivable	30,800.00
Cash	10,200.00
Supplies	5,200.00
Merchandise inventory	28,800.00
Total Current Assets	75,000.00
Answer b
Liabilities	Amount $
Accounts Payable	20,400.00
Current Liabilities	20,400.00
Long term debt	36,000.00
Non Current Liabilities	36,000.00
Total Liabilities	56,400.00
Answer c
Earnings from Operations
Particulars	Amount $
Net Sales	142,000.00
Service Revenue	25,800.00
Net Sales	167,800.00
Less: Cost of goods sold	88,000.00
Gross profit	79,800.00
Less: Expenses
Supplies Expense	13,900.00
Depreciation Expense	10,300.00
Total Expenses	24,200.00
Income from Operations	55,600.00
Answer d
Net Income
Income from Operations	55,600.00
Less: Interest Expense	3,800.00
Income before tax	51,800.00
Less: Tax Expense	13,986.00
Net Income	37,814.00
Statement of Retained Earnings	Amount $
Opening Balance	65,900.00
Add: Net Income for the year	37,814.00
Less: Dividend	-
Closing Balance	103,714.00
Answer b	Amount $
Stockholders' Equity at December 31, 2019
Common Stock	8,000.00
Retained Earnings	103,714.00
Stockholders' Equity	111,714.00
Answer e
Income before tax	51,800.00
Tax Expense	13,986.00
Average Tax rate	27.00%
Answer f
Statement of Retained Earnings	Amount $
Opening Balance	65,900.00
Add: Net Income for the year	37,814.00
Less: Dividend	16,500.00
Closing Balance	87,214.00