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P1-1 Assume that you are the president of Highlight Construction Company.

CF unit1 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.
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


File name: cf unit1 p1-1.xls     File type:  .xls  PRICE: $7