Question

You are provided with the following information for Ivanhoe Company, effective as of its April 30, 2022, year-end.

Accounts payable		$ 850
Accounts receivable		810
Accumulated depreciation—equipment		670
Cash		1,310
Common stock		17,400
Cost of goods sold		1,030
Depreciation expense		370
Dividends		340
Equipment		2,490
Goodwill		1,900
Income tax expense		185
Income taxes payable		140
Insurance expense		330
Interest expense		560
Inventory		980
Investment in land		12,965
Land		3,200
Mortgage payable (long-term)		3,500
Notes payable (short-term)		60
Prepaid insurance		70
Retained earnings (beginning)		1,400
Salaries and wages expense		850
Salaries and wages payable		270
Sales revenue		4,900
Stock investments (short-term)		1,800

Prepare a retained earnings statement for Ivanhoe Company for the year ended April 30, 2022. (List items that increase retained earnings first.) IVANHOE COMPANY Retained Earnings Statement

Answer 1

Income Statement:

IVANHOE COMPANY
Income Statement
For the year ended April 30,2022
Revenues:
Sales revenue		$4,900
Expenses:
Cost of goods sold	$1,030
Depreciation expense	$370
Salaries and wages expense	$850
Insurance expense	$330
Interest expense	$560
Income tax expense	$185
Total expenses		$3,325
Net income		$1,575

Retained earnings Statement:

IVANHOE COMPANY
Retained earnings Statement
For the year ended April 30,2022
Retained earnings, Beginning	$1,400
Add: Net income	$1,575
	$2,975
Less: Dividends	($340)
Retained earnings, Ending	$2,635

Balance sheet:

IVANHOE COMPANY
Balance Sheet
April 30,2020
Assets
Current Assets:
Cash		$1,310
Stock investments (short-term)		$1,800
Accounts receivable		$810
Inventory		$980
Prepaid insurance		$70
Total current assets			$4,970
Investments:
Investment in land			$12,965
Property,plant,and equipment:
Land		$3,200
Equipment	$2,490
(Less):Accumulated depreciation—equipment	($670)	$1,820
Total property,plant,and equipment			$5,020
Intangible assets:
Goodwill			$1,900
Total assets			$24,855
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable		$850
Income taxes payable		$140
Salaries and wages payable		$270
Notes payable (short-term)		$60
Total current liabilities			$1,320
Long-term Debt:
Mortgage payable (long-term)			$3,500
Total liabilities			$4,820
Stockholders' equity:
Common stock		$17,400
Retained earnings (beginning)		$1,400
Total stockholders' Equity			$18,800
Total liabilities and stockholders' equity			$23,620