Pope’s Garage had the following accounts and amounts in itsfinancial statements on December 31, 2013. Assume that all balancesheet items reflect account balances at December 31, 2013, and thatall income statement items reflect activities that occurred duringthe year then ended.
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| Accounts receivable | $ | 31,600 |
| Depreciation expense | | 11,900 |
| Land | | 25,900 |
| Costof goods sold | | 86,500 |
| Retained earnings | | 63,700 |
| Cash | | 10,000 |
| Equipment | | 70,500 |
| Supplies | | 5,700 |
| Accounts payable | | 22,600 |
| Service revenue | | 29,400 |
| Interest expense | | 3,200 |
| Common stock | | 6,000 |
| Income tax expense | | 22,425 |
| Accumulated depreciation | | 41,000 |
| Long-term debt | | 37,000 |
| Supplies expense | | 13,100 |
| Merchandise inventory | | 26,600 |
| Sales revenue | | 175,000 |
| a. | Calculate thetotal current assets at December 31, 2013. |
| b. | Calculate thetotal liabilities and stockholders’ equity at December 31,2013. |
| c. | Calculate theearnings from operations (operating income) for the year endedDecember 31, 2013. |
| d. | Calculate thenet income (or loss) for the year ended December 31, 2013. |
| e. | What was theaverage income tax rate for Pope’s Garage for 2013? |
| f. | If $18,500 of dividends had been declared and paid during theyear, what was the January 1, 2013, balance of retainedearnings? |
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