The following information was obtained from the records of Shae, Inc.: Except as
ID: 2543429 • Letter: T
Question
The following information was obtained from the records of Shae, Inc.:
Except as otherwise indicated, assume that all balance sheet items reflect account balances at December 31, 2016, and that all income statement items reflect activities that occurred during the year ended December 31, 2016. There were no changes in paid-in capital during the year. Required: a. Prepare an income statement and statement of changes in stockholders’ equity for the year ended December 31, 2016, and a balance sheet at December 31, 2016, for Shae, Inc. Based on the financial statements that you have prepared for part a, answer the questions in parts b–e.
The following informabon was obtained from the records of Shee·inc. : Merchandise inventory Notes payable (long-term $ 94,500 105,000 315,000 Buildings and equipment 189,000 Selling, general, and Accounts receivable Common stock (26,000 shares) Inoomo tax expense 31,500 47,250 130,000 153,757 Retained eamings, 1/116 79,950 Acorued liabilitea Cost of goods sold Accumulaied deprecation 85,050 nterest expense coounts payable 6,300 189,000 16,000 31,500 déclared and paid 8,243 during 2016 Except as otherwise indicated, assume that all balance shee ems reflect account balances at Deoamber 31, 2016, and that al income statement items refilect activities that occured during the year ended December 31, 2016. There were no changes in paid-in capital during the year a. Prepare an income stabement and statement of changes in stockholders' equity for the year ended December 31, 2016, and a balance sheet at December 31, 2016, for Snae, Inc. Based on the nancial statements that you have prepared for part a, answer the questions in parts b-e. ling, ganeral and acministrative Balance Sheet Assets Total as8ets Google Chrome StockholdersExplanation / Answer
a. Income statement
Sales = 315000
less: cost of goods sold = 189000
Gross profit = 126000
less: Selling, general and administrative
expenses = 31500
operating income = 94500
less: Interest expense = 16000
Earning before tax = 78500
less: income tax = 23550
Net income = $54950
b. Statement of changes in Stockholder's Equity
Paid in capital :
Common stock = 130000
Retained earnings
Beginning Balance 79950
Add: Net income 54950
less: Dividend 8243
Ending Balance = 126657
Total Stockholder's equity = $256657
c. Balance Sheet
Assets:
Cash 153757
Accounts receivable 47250
Merchandise inventory 94500
Total current assets 295507
Building and equipment 189000
less: Accumulated depreciation 85050 103950
Total Assets $399457
Liabilities:
Accounts payable 31500
Accrued liabilities 6300
Notes payable (long term) 105000
Total liabilities 142800
Stockholder's equity:
Common stock 130000
Retained earnings 126657
Total shareholder's equity 256657
Total Liabilities and shareholder's equity $399457
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