Question

A list of Year 3 revenues and expenses for Green Thumb, Inc. is provided below. $ Advertising and Promotion Expenses Income Tax Expense Interest Expense Other Expenses Other Selling & Administrative Expenses Sales Revenue Salaries and Wages Expense 263, 109 56,560 43.969 123,000 351 408 1,868. 309 725,40e Required: a. Calculate the net income for the Green Thumb Inc. for Year 3. b. Prepare a statement of retained earnings for Green Thumb, Inc. for Year 3. Assume the company had retained earnings of $162.600 as of January 1, Year 3. and paid out $46.060 in dividends during Year 3. Complete this question by entering your answers in the tabs below. Required A Required B Calculate the net income for the Green Thumb, Inc. for Year 3. Net Income

Answer 1

Solution

Net Income

$    3,04,880.00

GREEN THUMB, INC.
Statement of Retained earnings
For the Year ended December 31 ' Year 3
Retained Earnings January 1, Year 3	$    1,62,600.00
Add: Profit Earned during the year	$    3,04,880.00
Less: Dividend Declared during the year	$        46,060.00
Retained Earnings December 31, Year 3	$    4,21,420.00

Working

GREEN THUMB, INC.
Income Statement
Sales	$ 18,68,300.00
Operating Expenses
Advertising and sales promotion expenses	$    2,63,100.00
Salaries and wages expenses	$    7,25,400.00
Other selling and administrative expenses	$    3,51,400.00
Others
Interest Expense	$        43,960.00
Other expenses	$    1,23,000.00
Net income Before Taxes	$    3,61,440.00
Income tax	$        56,560.00
Net Income	$    3,04,880.00