Answer:
a. Green Thumb
Net Income for the year 3
Particulars Amount
Sales revenue $1,871,300
<u>Operating expenses</u>
Advertising expense $263,700
Salaries and wages expense $726,000
Other selling expenses $352,000
Other expenses <u>$123,600</u> <u>$1,465,300</u>
Earnings before interest and taxes $406,000
Interest expense <u>$44,020 </u>
Earnings before taxes $361,980
Income tax expense <u>$56,620</u>
Net Income <u>$305,360</u>
b. Green Thumb Inc.
Statement of retained earnings
For the year ended Dec 31, Year 3
Retained Earnings, Jan 1 year 3 $163,200
Add: Net Income $305,360
Less: Dividend paid <u>$46,120</u>
Retained Earnings, Dec 31 year 3 <u>$422,440</u>