Let’s assume that you are a newly-hired finance manager for NH Corporation, a small but growing manufacturing company of winter hiking socks. On your first day at work, 12/31/2014, CFO tells you that the company has 50K shares of common stock. Also, that same day, you review the company’s accounts with the CFO revealed the following information:
Loss due to magnitude 8 earthquake 56K
Marketing and sales expenses 128K
Cash and cash equivalents 60K
Accounts receivable 90K
Common stock 200K
COGS 701K
Accumulated depreciation 180K
Dividend revenues 8K
Unearned service revenue 4.4K
Interest payable 1K
Land 370K
Patents 100K
Retained earnings, 1/1/2014 290K
Interest expense 17K
Administrative expenses 170K
Dividends declared 24K
Allowance for doubtful accounts 5K
Notes payable (matures on July 1, 2017) 200K
PP&E 450K
Raw Materials 40K
Accounts payable 60K
Further, you learn from a finance director that the amount of income taxes for ordinary income was $57.6K, not including the tax effect of the earthquake loss of $24K.
Instructions
(a) Please put together an income statement (multistep)
(b) Please put together a retained earnings statement.