The following 81000 ER42600 46440 owned at cost less used po

The following 81,000 ER42,600 46,440 owned, at cost less used portion Total sales revenue r 31) Belance Sheet LO11

Solution

Answer Part 1 HIGHLIGHT CONSTRUCTION COMPANY Income Statement For the Year ended December 31,Current Year Sales Revenue $128,000 Less : Expenses,including the cost of the merchandise sold $81,200 Pretax Income $46,800 Less : Income Tax @ 30% $14,040 Net Income $32,760 Answer Part 2 HIGHLIGHT CONSTRUCTION COMPANY Statement of Stockholders Equity For the Year ended December 31,Current Year Common stock Retained Earnings Balance January 1,current year $0 $0 Add : Issued during the year $90,500 $0 Add : Net Income for the Current year $0 $32,760 Less : Dividend declared during the current year $0 $11,500 Balance December 31,Current Year $90,500 $21,260 Answer Part 3 HIGHLIGHT CONSTRUCTION COMPANY Balance Sheet As on December 31,Current year Assets Cash $25,300 Receivable from Customers $12,500 Inventory of Merchandise $81,000 Equipment (net) $42,600 Total Assets $161,400 Liabilities and Equity Accounts Payable $46,440 Salary Payable $3,200 Common stock $90,500 Retained Earnings $21,260 Total Liabilities and Equity $161,400