Answer:
Ending retained earning for 2015 = $345,000
Total Assets = $645,000
Shareholder's equity = $445,000
Total liabilities = $200,000
Explanation:
a. Income Statement for the year ended 2015
<u>Details $ </u>
Sales 800,000
Cost of Goods Sold <u>300,000</u>
Gross profit 500,000
Advertising Expense (1,000)
Administrative Expenses (35,000)
Depreciation Expense (40,000)
Rent Expense <u> (5,000) </u>
Operating income 419,000
Interest Expense <u> (24,000) </u>
Income before tax 395,000
Taxation (40% * $395,000) <u> (158,000) </u>
Net income 237,000
Dividend paid <u> (137,000) </u>
Retained earning for the year 100,000
Beginning retained earning <u> 245,000 </u>
Ending retained earning <u> 345,000 </u>
a. Balance sheet as at the year ended 2015
<u>Details $ $ </u>
Assets:
Beginning Net Fixed Assets 600,000
Depreciation <u> 40,000</u>
Ending Net Fixed Assets 560,000
Current Assets:
Cash 20,000
Accounts Receivables 20,000
Inventory <u> 45,000</u>
Total Assets <u>645,000</u>
Shareholder's Fund:
Common Stock 100,000
Ending retained earning <u> 345,000</u>
Shareholder's equity 445,000
Bonds Outstanding 160,000
Accounts Payable 20,000
Accruals <u> 20,000 </u>
Total liabilities <u>200,000</u>
Total equities and Liabilities <u> 645,000</u>
