Answer:
A. Net Income = $304,560
B. Ending Retained Earnings = $420,740
Explanation:
Req. (A)
Green Thumb, Inc.
Income Statement
For the year ended, 31 December, 20Y3
Revenues:
Sales Revenues $1,866,300
Expenses:
Salaries and wages expenses $725,000
Advertising and Promotion Expenses 262,700
Income Tax Expense 56,520
Interest Expense 43,920
Other Expenses 122,600
Other Selling & Administrative Expenses 351,000
Total Expenses = ($1,561,740)
Net Income = $304,560
Note: We can use a multiple step income statement. However, as there is no instruction, we use single step income statement.
Req. (B)
Green Thumb, Inc.
Statement of Retained Earnings
For the year ended, 31 December, 20Y3
Balances, January 1 $162,200
Add:
Net income for the current year $304,560
Less: Dividends ($46,020)
Balances, December 31 $420,740
Note: Here, Balances, January 1 = Beginning Retained earnings Balance
Balances, 31 December = Ending retained earnings.
