Gary's TV had the following accounts and amounts in its financial statements on December 31, 2016. Assume

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Gary's TV had the following accounts and amounts in its financial statements on December 31, 2016. Assume that all balance sheet items reflect account balances at December 31. 2016, and that all income statement items reflect activities that occurred during the year then ended.

Interest expense.......................................... $ 9,000

Paid-in capital............................................. 20.000

Accumulated depreciation.............................. 6,000

Notes payable (long-term)............................... 70,000

Rent expense.............................................. 18.000

Merchandise inventory................................... 210.000

Accounts receivable....................................... 42.000

Depreciation expense...................................... 3,000

Land......................................................... 32.000

Retained earnings..........................................225.000

Caste......................................................... 36.000

Cost of goods sold.......................................... 440,000

Equipment.................................................... 18.000

Income tax expense........................................... 60.000

Accounts payable............................................. 23.000

Sales revenue................................................... 620.000

Required:

a. Calculate the difference between current assets and current liabilities for Gar's TV at December 31. 2016.

b. Calculate the total assets at December 3 1. 2016.

c. Calculate the earnings from operations (operating income) be the year ended December 31, 2016.

d. Calculate the net income (or loss) for the year ended December 31, 2016.

e. What was the average income tax rate for Gary's TV for 2016?

f. If $64.000 of dividends had been declared and paid during the year, what was the January 1, 2016, balance of retained earnings?

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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Accounting What the Numbers Mean

ISBN: 978-1259535314

11th edition

Authors: David Marshall, Wayne McManus, Daniel Viele

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