[The following information applies to the questions displayed below.] Assume that you are the president of Highlight Construction Company. At the end of the first year of operations (December 31), the following financial data for the company are available: Cash Receivables from customers (all considered collectible) Inventory of merchandise (based on physical count and priced at cost) Equipment owned, at cost less used portion Accounts payable owed to suppliers Salary payable (on December 31, this was owed to an employee who will be paid on January 10) Total sales revenue Expenses, including the cost of the merchandise sold (excluding income taxes) Income tax expense at 30% × pretax income; all paid during the current year Common stock (December 31) Dividends declared and paid during the current year (Note: The beginning balances in Common stock and Retained earnings are zero because it is the first year of operations.) P1-1 Part 1 Required: 1. Prepare a summarized income statement for the year. Answer is complete but not entirely correct. HIGHLIGHT CONSTRUCTION COMPANY Income Statement For the Year Ended December 31, Current Year Total sales revenue $ 128,000 Total expenses Pretax income Income tax expense Inventory of merchandise Net income 80,200 47,800 0x 70,000 $ 25,900 11,400 70,000 40,800 46,840 2,100 128,000 80, 200 ? 0x 76,000 10,300

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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A-7

[The following information applies to the questions displayed below.]
Assume that you are the president of Highlight Construction Company. At the end of the first year of operations
(December 31), the following financial data for the company are available:
Cash
Receivables from customers (all considered collectible)
Inventory of merchandise (based on physical count and priced at cost)
Equipment owned, at cost less used portion
Accounts payable owed to suppliers
Salary payable (on December 31, this was owed to an employee who will be paid on January 10)
Total sales revenue
Expenses, including the cost of the merchandise sold (excluding income taxes)
Income tax expense at 30 % * pretax income; all paid during the current year
Common stock (December 31)
P1-1 Part 1
Required:
1. Prepare a summarized income statement for the year.
Dividends declared and paid during the current year
(Note: The beginning balances in Common stock and Retained earnings are zero because it is the first year of operations.)
Answer is complete but not entirely correct.
HIGHLIGHT CONSTRUCTION COMPANY
Income Statement
For the Year Ended December 31, Current Year
Total sales revenue
$ 128,000
Total expenses
80,200
Pretax income
47,800
Income tax expense
Inventory of merchandise
Net income
S
$ 25,900
11,400
70,000
40,800
0x
70,000 X
0x
46,840
2,100
128,000
80, 200
?
76,000
10,300
Transcribed Image Text:[The following information applies to the questions displayed below.] Assume that you are the president of Highlight Construction Company. At the end of the first year of operations (December 31), the following financial data for the company are available: Cash Receivables from customers (all considered collectible) Inventory of merchandise (based on physical count and priced at cost) Equipment owned, at cost less used portion Accounts payable owed to suppliers Salary payable (on December 31, this was owed to an employee who will be paid on January 10) Total sales revenue Expenses, including the cost of the merchandise sold (excluding income taxes) Income tax expense at 30 % * pretax income; all paid during the current year Common stock (December 31) P1-1 Part 1 Required: 1. Prepare a summarized income statement for the year. Dividends declared and paid during the current year (Note: The beginning balances in Common stock and Retained earnings are zero because it is the first year of operations.) Answer is complete but not entirely correct. HIGHLIGHT CONSTRUCTION COMPANY Income Statement For the Year Ended December 31, Current Year Total sales revenue $ 128,000 Total expenses 80,200 Pretax income 47,800 Income tax expense Inventory of merchandise Net income S $ 25,900 11,400 70,000 40,800 0x 70,000 X 0x 46,840 2,100 128,000 80, 200 ? 76,000 10,300
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