Fulton Company was established at the beginning of 2016 when several investors paid a total of $200,000 to purchase Fulton common stock. No additional investments in common stock were made during the year. By December 31, 2016, Fulton had cash on hand of $45,000, office equipment of $40,000, inventory of $156,000, and accounts payable of $10,000. Sales for the year were $812,000. Of this amount, customers still owed $20,000. Fulton declared and paid dividends of $25,000 to its stockholders during 2016.
Required:
1. Based on the information above, prepare a balance sheet for Fulton Company at December 31, 2016. In the process of preparing the balance sheet, you must calculate the ending balance in retained earnings.
2. Prepare a statement of stockholders' equity for the year ended December 31, 2016.
3. What was the amount of Fulton's net income for 2016?
4. Was Fulton successful during its first year in operation? Explain your answer.

Question

Quizplus · Accepted Answer

The Answer of Fulton Company was established at the beginning of 2016 when several investors paid a total of $200,000 to purchase Fulton common stock. No additional investments in common stock were made during the year. By December 31, 2016, Fulton had cash on hand of $45,000, office equipment of $40,000, inventory of $156,000, and accounts payable of $10,000. Sales for the year were $812,000. Of this amount, customers still owed $20,000. Fulton declared and paid dividends of $25,000 to its stockholders during 2016.
Required:
1. Based on the information above, prepare a balance sheet for Fulton Company at December 31, 2016. In the process of preparing the balance sheet, you must calculate the ending balance in retained earnings.
2. Prepare a statement of stockholders' equity for the year ended December 31, 2016.
3. What was the amount of Fulton's net income for 2016?
4. Was Fulton successful during its first year in operation? Explain your answer.

Fulton Company Was Established at the Beginning of 2016 When