Calculate the balance of retained earnings

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Question - The following items are taken from the financial statements of Ashe Company for 2012:

Equipment

$100,000

Accounts Receivable

12,000

Accounts Payable

9,000

Cost of Goods Sold

72,000

Utilities Expense

11,000

Depreciation Expense

17,000

Insurance Expense

9,000

Common Stock

200,000

Dividends

12,000

Rent Expense

3,000

Note Payable (due 2014)

40,000

Advertising Expense

14,000

Prepaid Insurance

17,000

Retained Earnings (beginning)

44,000

Accumulated Depreciation

50,000

Salaries Expense

60,000

Salaries Payable

3,500

Net sales

205,000

Supplies

4,000

Supplies Expense

5,000

Instructions

(a) Calculate the net income.

(b) Calculate the balance of Retained Earnings that would appear on a balance sheet at December 31, 2012.

(c) Calculate the gross profit percentage.

Reference no: EM132089090

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