JETER CORPORATION Income Statement For the Ye,r Ended December 31, 2010 Sales $
ID: 2648259 • Letter: J
Question
JETER CORPORATION
Income Statement
For the Ye,r Ended December 31, 2010
Sales $ 4,180,000
Cost of goods sold 2,740,000
Gross profits 1,440,000
Selling and administrative expense 653,000
Depreciation expense 244,000
Operating income 543,000
Interest expense 82,700
Earnings before taxes 460,300
Taxes 191,000
Earnings after taxes 269,300
Preferred stock dividends 10,000
Earnings available to common stockholders $ 259,300
Shares outstanding 150,000
Earnings per share $ 1.73
Statement of Retained Earnings
For the Year Ended December 31, 2010
Retained earnings, balance, January 1, 2010 $ 993,200
Add: Earnings available to common stockholders, 2010 259,300
Deduct: Cash dividends declared and paid in 2010 202,000
Retained earnings, balance, December 31, 2010 $ 1,050,500
Comparative Balance Sheets
For 2009 and 2010
Year-End
2009 Year-End
2010
Assets
Current assets:
Cash $ 130,000 $ 94,000
Accounts receivable (net) 509,000 537,000
Inventory 648,000 661,000
Prepaid expenses 66,700 38,700
Total current assets 1,353,700 1,330,700
Investments (long-term securities) 97,300 86,400
Plant and equipment 2,370,000 3,100,000
Less: Accumulated depreciation 1,120,000 1,364,000
Net plant and equipment 1,250,000 1,736,000
Total assets $ 2,701,000 $ 3,153,100
Liabilities and Stockholders
Explanation / Answer
Statement of cash flows
Particulars
Calculations or references
Amount
Cash flows from operating activity:
Net income
Earnings after taxes
$269,300
Add back depreciation
Difference between 2009 and 2010
$244,000
Increase in accounts receivable
Difference
($28,000)
Increase in inventory
Difference
($13,000)
Decrease in prepaid expense
Difference
$28,000
Increase in accounts payable
Difference
292,000
Decrease in accrued expense
Difference
($18,200)
Total adjustments
$504,800
Net cash flows from operating activities
$774,100
Decrease in investments (X)
Difference
$10,900
Increase in plant and equipment (Y)
Difference
($730,000)
Net cash flows from investing activities
X + Y
($719,100)
Increase in bonds payable (a)
$121,000
Preferred stock dividend (b)
($10,000)
Common stock dividend (c)
Op. Retained earnings + Earnings available for common stockholders
Particulars
Calculations or references
Amount
Cash flows from operating activity:
Net income
Earnings after taxes
$269,300
Add back depreciation
Difference between 2009 and 2010
$244,000
Increase in accounts receivable
Difference
($28,000)
Increase in inventory
Difference
($13,000)
Decrease in prepaid expense
Difference
$28,000
Increase in accounts payable
Difference
292,000
Decrease in accrued expense
Difference
($18,200)
Total adjustments
$504,800
Net cash flows from operating activities
$774,100
Decrease in investments (X)
Difference
$10,900
Increase in plant and equipment (Y)
Difference
($730,000)
Net cash flows from investing activities
X + Y
($719,100)
Increase in bonds payable (a)
$121,000
Preferred stock dividend (b)
($10,000)
Common stock dividend (c)
Op. Retained earnings + Earnings available for common stockholders
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.