Fulton Company was established on January 1, 20X4 when several investors paid a total of $200,000 to purchase Fulton shares. No additional investments in shares were made during the year. By the end of that year, Fulton had cash on hand of $45,000, office equipment (net) of $40,000, inventories of $156,000, and trade payables of $10,000. Sales for the year were $812,000. Of this amount, customers still owed $20,000. Fulton paid dividends of $25,000 to its investors. Required:
1. Based on the information above, prepare a statement of financial position for Fulton Company as at December 31, 20X4. In the process of preparing the statement, you must calculate the ending balance in retained earnings.
2. What was the amount of Fulton 's profit for the year?
3. Was Fulton successful during its first year in operation ?

Question

Fulton Company was established on January 1, 20X4 when several investors paid a total of $200,000 to purchase Fulton shares. No additional investments in shares were made during the year. By the end of that year, Fulton had cash on hand of $45,000, office equipment (net) of $40,000, inventories of $156,000, and trade payables of $10,000. Sales for the year were $812,000. Of this amount, customers still owed $20,000. Fulton paid dividends of $25,000 to its investors. Required: 
1. Based on the information above, prepare a statement of financial position for Fulton Company as at December 31, 20X4. In the process of preparing the statement, you must calculate the ending balance in retained earnings. 
2. What was the amount of Fulton 's profit for the year? 
3. Was Fulton successful during its first year in operation ?

Quizplus · Accepted Answer

The Answer of Fulton Company was established on January 1, 20X4 when several investors paid a total of $200,000 to purchase Fulton shares. No additional investments in shares were made during the year. By the end of that year, Fulton had cash on hand of $45,000, office equipment (net) of $40,000, inventories of $156,000, and trade payables of $10,000. Sales for the year were $812,000. Of this amount, customers still owed $20,000. Fulton paid dividends of $25,000 to its investors. Required: 
1. Based on the information above, prepare a statement of financial position for Fulton Company as at December 31, 20X4. In the process of preparing the statement, you must calculate the ending balance in retained earnings. 
2. What was the amount of Fulton 's profit for the year? 
3. Was Fulton successful during its first year in operation ?

Fulton Company Was Established on January 1, 20X4 When Several