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(Solved): Pope’s Garage Had The Following Accounts And Amounts In Its Financial Statements On December 31, ...


Pope’s Garage had the following accounts and amounts in its financial statements on December 31, 2013. Assume that all balance sheet items reflect account balances at December 31, 2013, and that all income statement items reflect activities that occurred during the year then ended.

  

  Accounts receivable $ 30,200
  Depreciation expense 10,600
  Land 26,300
  Cost of goods sold 88,500
  Retained earnings 61,400
  Cash 11,800
  Equipment 70,000
  Supplies 5,400
  Accounts payable 22,500
  Service revenue 29,700
  Interest expense 2,400
  Common stock 5,000
  Income tax expense 20,625
  Accumulated depreciation 44,000
  Long-term debt 37,000
  Supplies expense 12,700
  Merchandise inventory 26,200
  Sales revenue 167,000

  

Required:
a. Calculate the total current assets at December 31, 2013.

     

b. Calculate the total liabilities and stockholders’ equity at December 31, 2013.

     

c. Calculate the earnings from operations (operating income) for the year ended December 31, 2013.

     

d. Calculate the net income (or loss) for the year ended December 31, 2013.

     

e. What was the average income tax rate for Pope’s Garage for 2013?

     

f.

If $18,500 of dividends had been declared and paid during the year, what was the January 1, 2013, balance of retained earnings?

    



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(a) Calculate the total current assets at December 31, 2013. Accounts receivable...$30200 Cash..11800 Supplies...5400 Merchandis
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