Problem 2-17 Understanding and analyzing financial statement relationships-sales/service organization [LO 2, 3, 4]

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.

Accounts receivable	$	32,200
Depreciation expense		11,100
Land		26,000
Cost of goods sold		89,000
Retained earnings		63,100
Cash		11,100
Equipment		70,500
Supplies		5,100
Accounts payable		20,700
Service revenue		24,100
Interest expense		2,300
Common stock		8,000
Income tax expense		19,320
Accumulated depreciation		42,000
Long-term debt		38,000
Supplies expense		12,700
Merchandise inventory		26,900
Sales revenue		175,000

Required:

a.	Calculate the total current assets at December 31, 2013.

b.	Calculate the total liabilities and stockholders equity 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 Popes Garage for 2013?

f.	If $19,000 of dividends had been declared and paid during the year, what was the January 1, 2013, balance of retained earnings?