Understanding and analyzing financial statement relationships- merchandising organization
Response to the following problem:
Gary's TV had the following accounts and amounts in its financial statements on December 31, 2013. Assume that all balance sheet items reflect account balances at December 31, 2013, and that all income statement items reflect activities that occurred during the year then ended.
Interest expense $ 18,000
Paid-in capital 40,000
Accumulated depredation 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
Required:
a. Calculate the difference between current assets and current liabilities for Gary's TV at December 31, 2013.
b. Calculate the total assets at December 31, 2013.
c. Calculate the earnings from operations (operating income) for the year ended December 31, 2013.
d. Calculate the net income (or loss) for the year ended December 31, 2013.
e. What was the average income tax rate for Gary's TV for 2013?
f. If $128,000 of dividends had been declared and paid during the year, what was the January 1, 2013, balance of retained earnings?