Reference no: EM13535236

Understanding and analyzing financial statement relationships-sales / service organization Pope's Garage had the following accounts and amounts in its financial statements on December 31, 2010. Assume that all balance sheet items reflect account balances at December 31, 2010, and that all income statement items reflect activities that occurred during the year then ended.

Accounts   receivable	$33,000
Depreciation   expense	12,000
Land	27,000
Cost of   goods sold	90,000
Retained   earnings	59,000
Cash	9,000
Equipment	71,000
Supplies	6,000
Accounts   payable	23,000
Service   revenue	20,000
Interest   expense	4,000
Common   stock	10,000
Income   tax expense	12,000
Accumulated   depreciation	45,000
Long-term   debt	40,000
Supplies   expense	14,000
Merchandise   inventory	31,000
Sales   revenue	140,000

Required:

a. Calculate the total current assets at December 31, 2010.

b. Calculate the total liabilities and owners' equity at December 31, 2010.

c. Calculate the earnings from operations (operating income) for the year ended December 31, 2010.

d. Calculate the net income (or loss) for the year ended December 31, 2010.

e. What was the average income tax rate for Pope's Garage for 2010?

f. If $16,000 of dividends had been declared and paid during the year, what was the January 1, 2010, balance of retained earnings?