Question

Dickens Corp.’s fiscal year ends on December 31. It started fiscal year 20X6 with $4,800 retained earnings. Below is its financial information as of December 31, 20X6.Cash $3,810Depreciation expense$1,005Accumulated depreciation-property, plant, & equipment $2,010Accounts receivable $2,430Inventory $2,901Dividends $975Salaries and wages expense $2,100Income tax payable $404Short-term investment $3,600Accounts payable $2,502Property, plant, & equipment $7,260Salaries and wages payable $667Land $9,300Interest expense $1,200Mortgage payable $10,500Cost of goods sold $3,180Insurance expens $630Prepaid insurance $180Notes payable $183Sales Revenue $15,300Common stock $2,700Income tax expense $495Prepare the following financial statements for Dickens Corp. Ensure you include appropriate headings and statements are in good form.1) Income statement for the year ended December 31, 20X6.2) Retained earnings statement for the year ended December 31, 20X6.3) Classified balance sheet as of December 31, 20X6.

Answer 1

(1) Income Statement for the year ended December 31,20X6

$ $

Sales Revenue 15,300

Cost of goods sold - 3,180

Gross Profit 12,120

Administrative Expenses ( WK 1) - 3,735

Operating Income 8,385

Finance costs (Interest expenses) - 1,200

Profit before tax 7,185

Income Tax expenses - 495

Profit after tax 6,690

(2)Retained Earnings Statement for the year ended December 31,20X6

$ $

Balance as at January 1,20X6 4,800

Current year profit 6,690

Dividends - 975

Retained Earnings as at December 31, 20X6 10,515

(3)Balance Sheet as at the year ended December 31 ,20X6

$ $

Non-current Assets :

Property, Plant & Equipment ( WK 2) 5,250

Land 9,300 14,550

Current Assets :

Cash 3,810

Account Receivables 2,430

Inventory 2,901

Short-term investment 3,600

Prepaid Insurance 180

12,921

Current Liability :

Income Tax Payable 404

Salaries & wages payable 667

Notes payable 183

Account payable 2,502

3,756

Net current Assets 9,165

TOTAL ASSETS LESS CURRENT LIABILITIES 23,715

FINANCED BY :

Equity & Non-current liabilities

Equity :

Equity -Common Stock 2,700

Retained Earnings 10,515 13,215

Non-current liabilities

Mortgage Payable 10,500

TOTAL EQUITY & LIABILITIES 23,715

Step-by-step explanation:

Workings $

1 ) Administrative Expenses

Depreciation expenses 1,005

Salaries & wages expenses 2,100

Insurance Expenses 630

3,735

2) Property,Plant & Equipment

Cost 7,260

Accumulated Depreciation 2,010

Net Book Value (NBV) 5,250