Question

Assume that you are the president of Highlight Construction Company. At the end of the first year of operations (December 31), the following financial data for the company are available: $ 25,300 11,100 75,00ר 42,400 47,240 3,500 124,000 89,200 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 Accounts payable owed to suppliers Salary payable (on December 31, this was owed to an employee who will be paid on January 10) Total sales revenue Expenses, including the cost of the merchandise sold (excluding income taxes) Income tax expense at 30% x pretax income; all paid during the current year Common stock (December 31) 88,900 10,200 Dividends declared and paid during the current year (Note: The beginning balances in Common stock and Retained earnings are zero because it is the first year of operations.) Required: 1. Prepare a summarized income statement for the year. HIGHLIGHT CONSTRUCTION COMPANY Income Statement For the Year Ended December 31, Current Year Cash 25,300

Answer 1

Answer

--Requirement 1

Income Statement
For the year ended 31 Dec, current year
Total Sales Revenue	$124,000
Expenses (including cost of goods sold)	$89,200
Pretax Income OR Operating Income before income taxes	$34,800
Income tax expense ($34800 x 30%)	$10,440
Net Income - after tax	$24,360