Lopez Corporation Began Operations at the Start of 20C

question 109

Essay

Lopez Corporation began operations at the start of 20C.During the year,it made cash and credit sales totalling $974,000 and collected $860,000 in cash from its customers.It purchased inventory costing $508,000,paid $25,000 for dividends and the cost of goods sold was $445,000.The corporation incurred the following expenses:
Required:
1.Prepare an income statement showing revenues,expenses,pretax profit,income tax expense,and profit for the year ended December 31,20C.
2.Based on the above information,what is the amount of trade receivables on the statement of financial position prepared at the end of 20C?
3.Based on the above information,what is the amount of retained earnings on the statement of financial position prepared at the end of 20C?

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Definitions:

Long-run Profits

Profits achieved over a longer period, reflecting the sustainability and effectiveness of a business strategy.

Formal Promotions

Organized, official advancement of employees to higher positions with more responsibility within a company.

Baby Boomers

A demographic group born during the post-World War II baby boom, between the years 1946 and 1964.

Generation X

The demographic cohort following the baby boomers and preceding the Millennials, typically defined as individuals born from the early-to-mid-1960s to the late 1970s.