Answered Essay: Pope's Garage had the following accounts and amounts in its financial statements on December 31, 2013. Assume that all balance sheet i

Popes Garage 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 30,800 Accounts receivable Depreciation expense Land Cost of goods sold Retained earnings 11,500 25,800 89,000 nces 65,000 Cash Equipment Supplies 10,700 71,000 5,700 20,900 Accounts payable 20,700 Service revenue Interest expense Common stock Income tax expense 3.400 8,000 14,067 44,000 Accumulated depreciation 36,000 Long-term debt 13,700 29,900 Supplies expense Merchandise inventory Sales revenue 149,000 Required: o. Calculate the total current assets at December 31, 2013. Prex list docx ^ む-8212017829264-.00 ^
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Pope’s Garage 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 30,800 Accounts receivable Depreciation expense Land Cost of goods sold Retained earnings 11,500 25,800 89,000 nces 65,000 Cash Equipment Supplies 10,700 71,000 5,700 20,900 Accounts payable 20,700 Service revenue Interest expense Common stock Income tax expense 3.400 8,000 14,067 44,000 Accumulated depreciation 36,000 Long-term debt 13,700 29,900 Supplies expense Merchandise inventory Sales revenue 149,000 Required: o. Calculate the total current assets at December 31, 2013. Prex list docx ^ む-8212017829264-.00 ^

Expert Answer

 

a. Total Current asset as at December31,2013
accounts Receivable $30,800
Cash $10,700
Supplies $5,700
Merchandise Inventory $29,900
Total $77,100
Total current asset as at December 31,2013 $77,100
b. Total Liabilities and stockholders equity as at December 31, 2013
Liabilities:
Accounts payable $20,900
Long term debt $36,000
Total Liabilities $56,900
Stock holders Equity
Common stock $8,000
Retained earnings $65,000
Toal Stock holders Equity $73,000
Total Liabilities and stockholders equity as at December 31, 2013 $129,900
c. Earnings from operations(operating income) for the year ended December 31, 2013
Sales Revenue $149,000
Service revenue $20,700
Cost of goods sold ($89,000)
Gross income $80,700
Depreciation expense ($11,500)
Supplies expense ($13,700)
Interest expense ($3,400)
Earnings from operations(Operating income) for the year ended December 31, 2013 $52,100
d. Net income for the year ended December 31,2013
Operating Income $52,100
Income tax expense ($14,067)
Net income for the year ended December 31,2013 $38,033
e Average Income Tax rate for 2013
Income tax $14,067 0.27
Operating Income $52,100
Average Income Tax rate for 2013 27% (14067/52100)=0.27=27%
f. january 1, 2013 balance of retained earning:
Operating Income $52,100
Dividend paid ($19,000)
Earning retained in the year 2013 $33,100
Retained earning asper balance sheet $65,000
January 1, 2013 balance of retained earnings $98,100
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