Window Helg Safari File Edit View History Bookmarks Income S

Window Helg Safari File Edit View History Bookmarks Income Statement 5 294,000 185,000 Pretax income Less: Income tax expense Net income 33,400 65450 Merchandise inventory Total assets 194.350 Payables to supplers Income tases $ 28.150 28.150 ockholders Equty MacBook 2 4 5 ab

Solution

Income statement calculations and explanations:

Pretax income = total revenues - expenses = 294,000 - 185,000 = 109,000

Net income = pretax income - income tax expense = 109,000 - 33,400 = 75,600

Balance sheet calculations:

Income tax payable = 33,400 (from income statement assuming all tax amount is due)

Total liabilities = payables+income taxes payable = 28150+33400 = 61,550

We know that total liabilities and equity = total assets. Total assets = 194,350 (provided in the question).

Hence total liabilities and equity = 194,350.

Retained earnings = net income for the year = 75,600.

Thus common stock will be the balancing figure. Common stock = total liabilities and equity - total liabilities - retained earnings = 194,350 - 61,550 - 75,600 = $57,200

The financial statements are provided below:

Income statement:
Total revenues	294,000.00
less: total expenses	185,000.00
Pre tax income	109,000.00
less: income tax expenses	33,400.00
Net income	75,600.00
Balance sheet:
Assets
Cash	65,450
Receivables	33,400
Inventory	95,500
Total assets	194,350.00
Liabilities:
Payables	28,150.00
Income taxes payable	33,400.00
Total liabilities	61,550.00
Stockholder\'s equity:
Common stock	57,200.00
Retained earnings	75,600.00
Total stockholder\'s equity	132,800.00
Total liabilities and equity	194,350.00