Answers to Practice Problems chap002 (2)

Answers to Practice Problems chap002 (2) - Chapter 2...

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Unformatted text preview: Chapter 2 Financial Statements and Accounting Concepts/Principles P2.13. a. BREANNA, INC. Income Statement For the Year Ended December 31, 2009 Sales................................................................................................... $200,000 Cost of goods sold.............................................................................. (128,000) Gross profit........................................................................................ $ 72,000 Selling, general, and administrative expenses .................................. (34,000) Earnings from operations (operating income)................................... $ 38,000 Interest expense.................................................................................. (6,000) Earnings before taxes......................................................................... $ 32,000 Income tax expense............................................................................ (8,000) Net income......................................................................................... $ 24,000 BREANNA, INC. Statement of Changes in Owners Equity For the Year Ended December 31, 2009 Paid-in capital: Common stock ...................................................................... $ 90,000 Retained earnings: Beginning balance.................................................................. $ 23,000 Net income for the year ......................................................... 24,000 Less: Dividends declared and paid during the year............... (12,000) Ending balance ...................................................................... 35,000 Total owners equity. ............................................................. $125,000 BREANNA, INC. Balance Sheet December 31, 2009 Assets: Cash ....................................................................................... $ 65,000 Accounts receivable............................................................... Accounts receivable....
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Answers to Practice Problems chap002 (2) - Chapter 2...

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