BUSINESS

assume that you are the president of Highlight Construction comapny. at the end of the first year ( December 31, of operations the following financial data for the company are available:

Cash…………………………………….$25,600

Receivables from customers ( all considered collectible)…………10,800

inventory of merchandise( based on physical count and priced at cost)……………..81,000

equipment owned, at cost less used portion………………………………………….42,000

accoubts payable owed to suppliers…………………………………….46,140

Salary payable for 2014 ( on December 31, 2014 this was owed to an employee who was away because of an emergency; will return around january 10,2015, at which time the payment will be made)……………………………………………………………………2,520

total sales revenue………………………………………………………..128,400

expenses, including the cost of the merchandise sold (excluding income taxes)…………………80,200

income taxes expense at 30% X [retax income; all paid during 2014…………………………………?

common staock ( december 31, 2014)……………………………………………………………..87,000

dividends declared and paid during 2014………………………………………………………..10,000

(note: the begining balances in common stock and retained earnings are zero because it is the first year of operations)

USINIG THE FINANCIAL STATEMENT EXHIBITS IN THE CHAPTER AS MODELS AND SHOWING COMPUTATIONS:

1. prepare a summarizd income statement for the year 2014.

2.prepare a statement of stockholders’ equity for the year 2014

3. prepare a balance sheet at December 21,2014.

Required:
1. Prepare a summarized income statement for the year 2014.
HIGHLIGHT CONSTRUCTION COMPANY
Income Statement
For the Year Ended December 31, 2014
Total sales revenue
Total expenses
Pretax income
Income tax expense
2. Prepare a statement of stockholders’ equity for the year 2014
HIGHLIGHT CONSTRUCTION COMPANY
Statement of Stockholders’ Equity
For the Year Ended December 31, 2014
Common Stock Retained Earnings
Balance December 31, 2013
Balance December 31, 2014
3. Prepare a balance sheet at December 31, 2014.
HIGHLIGHT CONSTRUCTION COMPANY
Balance Sheet
At December 31, 2014
Assets
Total assets $              –
Liabilities
Total liabilities $              –
Stockholders’ Equity
Total stockholders’ equity $              –
Total liabilities and stockholders’ equity $              –

 

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