Question

The accountant for Flagger Corporation prepared the following list of account balances from the company's records for the year ended December 31: US $ US $ Sales Revenue 165,000 Cash 30,000 Accounts Receivable 14,000 Selling Expenses 44,000 Equipment 42,000 Common Stock 17,000 Accounts Payable 12,000 Interest Income 3,000 Salaries Expense 40,000 Cost of Sales 51,000 Inventories 22,000 Prepaid Expenses 2,000 Income Taxes Payable 5,000 Income Tax Expenses 18,000 Notes Payable 20,000 Retained Earnings ??????? Required: Prepare the following Financial Statements: (a) Income Statement (b) Retained Earnings (Equity) Statement and a ('c) Balance Sheet for Flagger Corporation as at December 31, 2018.

Answer 1

Flagger Corporation (a) Income statement For the Year ended December 31,2018 Revenue Sales Revenue Less: cost of sales Gross Profit Selling and Administrative Expenses Selling Expenses Salaries Expenses Total Selling and administrative Expenses Income from operations Other Income /(Expenses) Interest income Income before Income Tax Income Tax Expense Net Income S 165,000 51,000 S S 114,000 44,000 S 40,000 S 84,000 S 30,000 S 30,000 60,000 S 18,000 S 42,000 Flagger Corporation Statement of Retained Earnings For the Year ended December 31.2018 (b) Retained Earnings, Beginning Add: Net Income/ (Loss) S 212,000 42,000 254,000 Less: Dividends paid Retained Earnings, Ending S S 254,000

Flagger Corporation Balance Sheet As on December 31,2018 |(c) Assets Current assets Cash S 30,000 Accounts Receivables Inventory Prepaid Expenses Total Current Assets |Property plant and Equipment Equipment Total Property, plant and Equipment Total assets 14,000 220,000 2,000 266,000 42,000 S 42,000 S 308,000 Liabilities and Stockholder's Equity Current Liabilities |Accounts Payable Income Taxes Payable Total Current liabilities Long term liabilities Notes payable Total Liabilities Shareholders Equity Common Stock Retained Earnings Total shareholders' Equity Total Liabilities and shareholder's Equity S 12,000 5,000 S 17,000 S 20,000 37,000 17,000 S 254,000 271,000 S S 308,000