Question

Assume that you are the president of Nuclear Company. At December 31, 2017, the end of the first year of operations, the following financial data for the company are available: $ 25,700 12,700 90,700 45,700 59,330 Cash Receivables from customers (all considered collectible) Inventory of merchandise (based on physical count and priced at cost) Equipment owned, at cost less used portion Payables to suppliers of merchandise Salary payable for 2017 (on December 31, 2017, this was owed to an employee, but the amount was not paid until January 10, 2018) Total sales revenue 2,350 147,000 95,400 Expenses, including the cost of the merchandise sold (excluding income taxes) Income taxes expense (at 30% of pretax earnings); all paid during 2017 Contributed capital, 7,700 shares outstanding No dividends were declared or paid during 2017. 77,000 Required: 1. Prepare a summarized statement of earnings for the year ended December 31, 2017. NUCLEAR COMPANY Summary Statement of Earnings For the Year Ended December 31, 2017 Total sales revenue Total expenses, excluding income taxes Earnings before income taxes Income tax expense Net earnings

Answer 1

Part 1

NUCLEAR COMPANY Summary Statement of Earnings For the Year Ended December 31, 2017
Total sales revenue	147000
Total expenses, excluding income taxes	95400
Earnings before taxes	51600
Income tax expense	15480
Net earnings	$36120

Part 2

NUCLEAR COMPANY Statement of Financial Position At December 31, 2017
Assets
Cash		25700
Accounts Receivable		12700
Merchandise inventory		90700
Equipment, net		45700
Total assets		$174800
Liabilities and Shareholders’ Equity
Liabilities:
Accounts payable	59330
Salary payable	2350
Total Liabilities		61680
Shareholders' equity:
Contributed capital	77000
Retained earnings	36120
Total shareholders' equity		113120
Total liabilities and shareholders' equity		$174800

Retained earnings = beginning balance + net earnings – dividends = 0+36120-0 = $36120