Problem:
Gary's TV 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.
Interest expense............................. 36,000
Paid in capital................................... 80,000
Accumulated depriciation .................. 24,000
Notes payable (long-term).............. 280,000
Rent expense.................................. 72,000
Merchandise inventory..................... 840,000
Accounts receivable......................... 192,000
Depreciation expense...................... 12,000
Land................................................. 128,000
Retained earnings............................ 900,000
cash................................................. 144,000
Cost of goods sold........................ 1,760,000
Equipment........................................ 72,000
Income tax expense........................ 240,000
Accounts payable............................ 92,000
Sales revenue............................ 2,480,000
Required to do:
Q1. Calculate the difference between current assets and current liabilities for Gary's TV at December 31, 2010.
Q2. Calculate the total assets at December 31, 2010.
Q3. Calculate the earnings from operations (operating income) for the year ended December 31, 2010.
Q4. Calculate the net income (or loss) for the year ended December 31, 2010.
Q5. What was the average income tax rate for Gary's TV for 2010?
Q6. If $256,000 of dividends had been declared and paid during the year, what was the January 1, 2010, balance of retained earnings?