Question

Below is the balance sheet and income statement information for Downtown Boutique, Inc. Assume the firm pays an average tax rate of 21% and did not issue or repurchase any common stock in 2018. Complete the income statement to find net income. Then calculate additions to retained earnings for 2018 (you will need to find the three missing values in the balance sheets first).

Downtown Boutique				Downtown Boutique
Balance Sheet				2018 Income Statement
	2017	2018
Assets
Current Assets				Sales Revenue	21,000
Cash	400	450		Cost of Goods Sold	8,500
Accounts Receivable	850	1200		Depreciation	2075
Inventory	1250	1100		Earnings Before Interest and Taxes	10,425
Total	2500	2750		Interest Expense	1,200
Fixed Assets
Net Fixed Assets	3500	3850
Total Assets	6000	6600
Liabilities and Owner's Equity
Current Liabilities
Accounts Payable	600	725
Notes Payable	450	350
Total	1050	1075
Long-term Debt	1850	2125
Owner's Equity
Common Stock	2700
Retained Earnings

Answer 1