P1-65A. (Learning Objectives 3, 4: Evaluate business operations; construct and analyzean income statement, a statement of retained earnings, and a balance sheet) The assetsand liabilities of Oak Hill Garden Supply, Inc., as of December 31, 2018, and revenues andexpenses for the year ended on that date are as follows:Equipment........................... $110,000Interest expense................... 10,300Interest payable ................... 2,700Accounts payable ................ 26,000Salary expense..................... 108,400Building............................... 406,000Cash.................................... 44,000Common stock.................... 13,800Land................................... $ 25,000Note payable...................... 99,600Property tax expense .......... 7,400Rent expense ...................... 41,200Accounts receivable............ 84,900Service revenue................... 452,600Supplies.............................. 6,300Utilities expense ................. 8,800Beginning retained earnings was $364,600, and dividends declared and paid totaled $107,000for the year.Requirements1. Prepare the income statement of Oak Hill Garden Supply, Inc., for the year endedDecember 31, 2018.2. Prepare the company’s statement of retained earnings for the year.3. Prepare the company’s balance sheet as of December 31, 2018.4. Analyze Oak Hill Garden Supply, Inc., by answering these questions:a. Was Oak Hill profitable during 2018? By how much?b. Did retained earnings increase or decrease? By how much?c. Which is greater, total liabilities or total stockholders’ equity? Who has a greater claimto Oak Hill’s assets: its creditors or its stockholders?
P1-65A. (Learning Objectives 3, 4: Evaluate business operations; construct and analyze
an income statement, a statement of
and liabilities of Oak Hill Garden Supply, Inc., as of December 31, 2018, and revenues and
expenses for the year ended on that date are as follows:
Equipment........................... $110,000
Interest expense................... 10,300
Interest payable ................... 2,700
Accounts payable ................ 26,000
Salary expense..................... 108,400
Building............................... 406,000
Cash.................................... 44,000
Common stock.................... 13,800
Land................................... $ 25,000
Note payable...................... 99,600
Property tax expense .......... 7,400
Rent expense ...................... 41,200
Accounts receivable............ 84,900
Service revenue................... 452,600
Supplies.............................. 6,300
Utilities expense ................. 8,800
Beginning retained earnings was $364,600, and dividends declared and paid totaled $107,000
for the year.
Requirements
1. Prepare the income statement of Oak Hill Garden Supply, Inc., for the year ended
December 31, 2018.
2. Prepare the company’s statement of retained earnings for the year.
3. Prepare the company’s balance sheet as of December 31, 2018.
4. Analyze Oak Hill Garden Supply, Inc., by answering these questions:
a. Was Oak Hill profitable during 2018? By how much?
b. Did retained earnings increase or decrease? By how much?
c. Which is greater, total liabilities or total
to Oak Hill’s assets: its creditors or its stockholders?
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