ACME Pest Control Services (organized as a corporation on September 1, 2012) has completed the accounting cycle for the second year, ended August 31, 2014. ACME Pest Control has also completed a correct trial balance as follows:
1. Prepare a statement of earnings for the reporting year ended August 31, 2014. Include income tax expense, assuming a 30 percent tax rate. Use the following major captions: revenues, expenses, net earnings before income tax, income tax, net earnings, and earnings per share (list each item under these captions as appropriate).
2. Prepare the journal entry to record income taxes for the year (not yet paid).
3. Prepare a statement of financial position at the end of the reporting year, August 31, 2014. Use the following captions (list each item under these captions as appropriate):
Current assets
Non- current assets
Current liabilities
Non- current liabilities
Shareholders’ Equity
Contributed capital
Retained earnings
4. Compute the net profit margin ratio and the return on equity. What do these ratios suggest?
5. Prepare the closing entries at August 31, 2014.

  • CreatedAugust 04, 2015
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