Problem:
| Interest expense |
$18,000 |
| Paid-in capital |
$40,000 |
| Accumulated depreciation |
$12,000 |
| Notes payable (long term) |
$140,000 |
| Rent expense |
$36,000 |
| Merchandise inventory |
$420,000 |
| Accounts receivable |
$96,000 |
| Depreciation expense |
$6,000 |
| Land |
$64,000 |
| Retained earnings |
$450,000 |
| Cash |
$72,000 |
| Cost of goods sold |
$880,000 |
| Equipment |
$36,000 |
| Income tax expense |
$120,000 |
| Accounts payable |
$46,000 |
| Sales revenue |
$1,240,000 |
Q1. Calculate the difference between current assets and current liabilities at December 31, 2007.
Q2. Calculate the total assets at December 31, 2007.
Q3. Calculate the earnings from operations (operating income) for the year ended December 31, 2007.
Q4. Calculate the net income (or loss) for the year ended December 31, 2007.
Q5. What was the average income tax rate for 2007?
Q6. If $128,000 of dividends had been declared and paid during the year, what was the January 1, 2007 balance of retained earnings?