Cf unit 1 P1-1 Cf unit 1 CP1-2 -- Assume that you are the president of Highlight Construction Company. At the end of the first year

Cf unit 1 P1-1 Highlight Construction Company
Cf unit 1 CP1-2 Finding Financial Information LO 1-1

P1-1 Preparing an Income Statement, Statement of Stockholders Equity, and Balance Sheet LO1-1

Assume that you are the president of Highlight Construction Company. At the end of the first year (December 31, 2014) of operations, the following financial data for the company are available:

Cash	$  5,600
Receivables from customers (all considered collectible)	0,800
Inventory of merchandise (based on physical count and priced at cost)	81,000
Equipment owned, at cost less used portion	42,000
Accounts 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% × pretax income; all paid during 2014	?
Common stock (December 31, 2014)	87,000
Dividends declared and paid during 2014	10,000

(Note: The beginning balances in Common stock and Retained earnings are zero because it is the first year of operations.)

Required:
1. Prepare a summarized income statement for the year 2014.
2. Prepare a statement of stockholders' equity for the year 2014
3. Prepare a balance sheet at December 31, 2014.

CP1-2 Finding Financial Information LO 1-1
Refer to the financial statements of Urban Outfitters in Appendix C at the end of this book.

Required:

1. What is the amount of net income for the most recent year?

Net income
This information can be found on the

2. What amount of revenue was earned in the most recent year?

Net sales
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3. How much inventory (in dollars) does the company have as of January 31, 2012?

Inventory
This information can be found on the

4. By what amount did cash and cash equivalents * change during the most recent year?

Cash and Cash Equivalents
This information can be found on the

5. Who is the auditor for the company?

* Cash equivalents are short-term investments readily convertible to cash whose value is unlikely to change.

TUTORIAL PREVIEW

1. Prepare a summarized income statement for the year 2014.

HIGHLIGHT CONSTRUCTION COMPANY
Income Statement
For the Year Ended December 31, 2014
Revenue
Sale Revenue	128,400
Expenses
Cost of the merchandise sold	80,200
Income before Income Tax	48,200

 

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