The following information was obtained from the records of Shae Inc.: Merchandise inventory Notes payable (long-term) Net sales Buildings and equipment Selling, general, and administrative expenses Accounts receivable Common stock (30,000 shares) Income tax expense Cash $162,000 180,000 540,000 324,000 54,000 81,000 270,000 32,400 313,326 166,050 |10,800 324,000 145,800 54,000 54,000 21,924 Retained earnings, 1/1/19 Accrued liabilities Cost of goods sold Accumulated depreciation Interest expense Accounts payable Dividends declared and paid during 2019 Except as otherwise indicated, assume that all balance sheet items reflect account balances at December 31, 2019, and that all income statement items reflect activities that occurred during the year ended December 31, 2019. There were no changes in paid-in capital during the year. Required: a. Prepare an income statement and statement of changes in stockholders' equity for the year ended December 31, 2019, and a balance sheet at December 31, 2019, for Shae Inc. Based on the financial statements that you have prepared for part a, answer the questions in parts b-e. b. What is the company's average income tax rate? C. What interest rate is charged on long-term debt? Assume that the year-end balance of long-term debt is representative of the average long-term debt account balance throughout the year.
The following information was obtained from the records of Shae Inc.: Merchandise inventory Notes payable (long-term) Net sales Buildings and equipment Selling, general, and administrative expenses Accounts receivable Common stock (30,000 shares) Income tax expense Cash $162,000 180,000 540,000 324,000 54,000 81,000 270,000 32,400 313,326 166,050 |10,800 324,000 145,800 54,000 54,000 21,924 Retained earnings, 1/1/19 Accrued liabilities Cost of goods sold Accumulated depreciation Interest expense Accounts payable Dividends declared and paid during 2019 Except as otherwise indicated, assume that all balance sheet items reflect account balances at December 31, 2019, and that all income statement items reflect activities that occurred during the year ended December 31, 2019. There were no changes in paid-in capital during the year. Required: a. Prepare an income statement and statement of changes in stockholders' equity for the year ended December 31, 2019, and a balance sheet at December 31, 2019, for Shae Inc. Based on the financial statements that you have prepared for part a, answer the questions in parts b-e. b. What is the company's average income tax rate? C. What interest rate is charged on long-term debt? Assume that the year-end balance of long-term debt is representative of the average long-term debt account balance throughout the year.
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter5: Inventories And Cost Of Goods Sold
Section: Chapter Questions
Problem 5.8MCP
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