Understanding and analyzing financial statement relationships-sales / service organization Pope's Garage had the following accounts and amounts in its financial statements on December 31, 2010. Assume that all balance sheet items reflect account balances at December 31, 2010, and that all income statement items reflect activities that occurred during the year then ended.
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Accounts receivable
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$33,000
|
|
Depreciation expense
|
12,000
|
|
Land
|
27,000
|
|
Cost of goods sold
|
90,000
|
|
Retained earnings
|
59,000
|
|
Cash
|
9,000
|
|
Equipment
|
71,000
|
|
Supplies
|
6,000
|
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Accounts payable
|
23,000
|
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Service revenue
|
20,000
|
|
Interest expense
|
4,000
|
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Common stock
|
10,000
|
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Income tax expense
|
12,000
|
|
Accumulated depreciation
|
45,000
|
|
Long-term debt
|
40,000
|
|
Supplies expense
|
14,000
|
|
Merchandise inventory
|
31,000
|
|
Sales revenue
|
140,000
|
Required:
a. Calculate the total current assets at December 31, 2010.
b. Calculate the total liabilities and owners' equity at December 31, 2010.
c. Calculate the earnings from operations (operating income) for the year ended December 31, 2010.
d. Calculate the net income (or loss) for the year ended December 31, 2010.
e. What was the average income tax rate for Pope's Garage for 2010?
f. If $16,000 of dividends had been declared and paid during the year, what was the January 1, 2010, balance of retained earnings?