Interest expense $18,000
Paid-in capital $40,000
Accumulated depreciation $12,000
Notes payable (long term) $140,000
Rent expense $36,000
Merchandise inventory $420,000
Accounts receivable $96,000
Depreciation expense $6,000
Retained earnings $450,000
Cost of goods sold $880,000
Income tax expense $120,000
Accounts payable $46,000
Sales revenue $1,240,000
a. Calculate the difference between current assets and current liabilities at December 31, 2007.
b. Calculate the total assets at December 31, 2007.
c. Calculate the earnings from operations (operating income) for the year ended December 31, 2007.
d. Calculate the net income (or loss) for the year ended December 31, 2007.
e. What was the average income tax rate for 2007?
f. If $128,000 of dividends had been declared and paid during the year, what was the January 1, 2007 balance of retained earnings?
This solution evaluates a financial statement, addressing current assets and liabilities, total assets, earning and dividends.