Lopez Corporation began operations at the start of 20X3. During the year, it made cash and credit sales totaling $974,000 and collected $860,000 in cash from its customers. It purchased inventory costing $508,000, paid $25,000 for dividends and the cost of goods sold was $445,000. The corporation incurred the following expenses: Required:
1. Prepare an income statement showing revenues, expenses, pretax profit, income tax expense, and profit for the year ended December 31, 20X3.
2. Based on the above information, what is the amount of trade receivables on the statement of financial position prepared at the end of 20X3?
3. Based on the above information, what is the amount of retained earnings on the statement of financial position prepared at the end of 20X3?

Question

Lopez Corporation began operations at the start of 20X3. During the year, it made cash and credit sales totaling $974,000 and collected $860,000 in cash from its customers. It purchased inventory costing $508,000, paid $25,000 for dividends and the cost of goods sold was $445,000. The corporation incurred the following expenses:  Required: 
1. Prepare an income statement showing revenues, expenses, pretax profit, income tax expense, and profit for the year ended December 31, 20X3. 
2. Based on the above information, what is the amount of trade receivables on the statement of financial position prepared at the end of 20X3? 
3. Based on the above information, what is the amount of retained earnings on the statement of financial position prepared at the end of 20X3?

Quizplus · Accepted Answer

The Answer of Lopez Corporation began operations at the start of 20X3. During the year, it made cash and credit sales totaling $974,000 and collected $860,000 in cash from its customers. It purchased inventory costing $508,000, paid $25,000 for dividends and the cost of goods sold was $445,000. The corporation incurred the following expenses:  Required: 
1. Prepare an income statement showing revenues, expenses, pretax profit, income tax expense, and profit for the year ended December 31, 20X3. 
2. Based on the above information, what is the amount of trade receivables on the statement of financial position prepared at the end of 20X3? 
3. Based on the above information, what is the amount of retained earnings on the statement of financial position prepared at the end of 20X3?

Lopez Corporation Began Operations at the Start of 20X3