The adjusted trial balance for China Tea Company at December 31, 2021, is presented below:
1 answer:
Answer:
Kindly check attached picture
Explanation:
Given the details below
Accounts Debit Credit
Cash $16,000
Accounts receivable 162,000
Prepaid rent 10,000
Supplies 31,000
Equipment 370,000
Accumulated depreciation $129,000
Accounts payable 11,000
Salaries payable 3,500
Interest payable 1,900
Notes payable (due in two years) 37,000
Common stock 210,000
Retained earnings 176,100
Dividends 27,000
Service revenue 360,000
Salaries expense 150,000
Advertising expense 75,000
Rent expense 18,000
Depreciation expense 32,000
Interest expense 2,500
Utilities expense 35,000
Totals $928,500 $928,500
Prepare an income statement for China Tea Company for the year ended December 31, 2021
Kindly check attached picture
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Answer:
a. $22,000
Explanation:
Provided information we have,
Investment details in Dubro Corp.
20% in preferred stock
40% in Common stock
Provided net income = $60,000 and dividend to preference stock = $10,000
Therefore, net income after dividend = $60,000 - $10,000 = $50,000
Dividend on preference shares = $10,000 20% = $2,000
Share in net income = $50,000 40% = $20,000
Total part of income to be added in income statement = Dividend on preference capital + share of net income = $2,000 + $20,000 = $22,000
Therefore, correct option is
a. $22,000