3/2/23, 11:46 PM
1.
Assignment Print View
Award: 10 out of 10.00 points
P1-1 Preparing a Statement of Earnings and a Statement of Financial Position LO1-1
Assume that you are the controller of Nuclear Company. At December 31, 2020, the end of the first year of
operations, the following financial data for the company are available:
Cash
$ 25,600
Receivables from customers (all considered collectible)
12,600
Inventory of merchandise (based on physical count and priced at cost)
90,600
Equipment owned, at cost less used portion
45,600
Payables to suppliers of merchandise
60,050
Salary payable for 2020 (on December 31, 2020, this was owed to an employee, but the amount was not paid
until January 10, 2021)
2,300
Total sales revenue
146,000
Expenses, including the cost of the merchandise sold (excluding income taxes)
94,500
Income taxes expense (at 30% of pretax earnings); all paid during 2020
?
Contributed capital, 7,600 shares outstanding
76,000
No dividends were declared or paid during 2020.
Required:
1. Prepare a summarized statement of earnings for the year ended December 31, 2020.
NUCLEAR COMPANY
Summary Statement of Earnings
For the Year Ended December 31, 2020
Total sales revenue

Total expenses, excluding income taxes
$
146,000


94,500

Earnings before income taxes

51,500
Income tax expense

15,450
Net earnings

$

36,050
2. Prepare a statement of changes in equity for the year ended December 31, 2020.
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3/2/23, 11:46 PM
Assignment Print View
NUCLEAR COMPANY
Statement of Shareholders’ Equity
For the Year Ended December 31, 2020
Contributed capital
Balance, January 1, 2020

Issuance of shares

Balance, December 31, 2020

$
76,000

76,000

36,050

36,050

Retained earnings
Balance, January 1, 2020

Net earnings

Balance, December 31, 2020

$
3. Prepare a statement of financial position at December 31, 2020.
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3/2/23, 11:46 PM
Assignment Print View
NUCLEAR COMPANY
Statement of Financial Position
As at December 31, 2020
Assets
Cash

Accounts receivable
$
25,600


12,600

Equipment, net

45,600

Merchandise inventory

90,600

Total assets
$
174,400
$
62,350
Liabilities and Shareholders’ Equity
Liabilities:
Accounts payable

Salary payable

$
60,050

2,300

Total liabilities
Shareholders' equity:
Contributed capital

Retained earnings

$
76,000

36,050

Total shareholders' equity
112,050
$
Total liabilities and shareholders' equity
174,400
4. This part of the question is not part of your Connect assignment.
References
Financial
Statements
P1-1 Preparing a
Statement of Earnings
and a Statement of
Financial Position LO11
Learning Objective: 01-01 Recognize the
information conveyed in each of the four basic
financial statements and describe how it is
used by different decision makers (investors,
creditors, and managers).
P1-1 Preparing a Statement of Earnings and a Statement of Financial Position LO1-1
Assume that you are the controller of Nuclear Company. At December 31, 2020, the end of the first year of
operations, the following financial data for the company are available:
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3/2/23, 11:46 PM
Assignment Print View
Cash
$ 25,600
Receivables from customers (all considered collectible)
12,600
Inventory of merchandise (based on physical count and priced at cost)
90,600
Equipment owned, at cost less used portion
45,600
Payables to suppliers of merchandise
60,050
Salary payable for 2020 (on December 31, 2020, this was owed to an employee, but the amount was not paid
until January 10, 2021)
2,300
Total sales revenue
146,000
Expenses, including the cost of the merchandise sold (excluding income taxes)
94,500
Income taxes expense (at 30% of pretax earnings); all paid during 2020
?
Contributed capital, 7,600 shares outstanding
76,000
No dividends were declared or paid during 2020.
Required:
1. Prepare a summarized statement of earnings for the year ended December 31, 2020.
NUCLEAR COMPANY
Summary Statement of Earnings
For the Year Ended December 31, 2020
Total sales revenue
$
Total expenses, excluding income taxes
146,000
94,500
Earnings before income taxes
51,500
F
Income tax expense
15,450
Net earnings
F
$
36,050
2. Prepare a statement of changes in equity for the year ended December 31, 2020.
NUCLEAR COMPANY
Statement of Shareholders’ Equity
For the Year Ended December 31, 2020
Contributed capital
Balance, January 1, 2020
Issuance of shares
Balance, December 31, 2020
76,000
$
76,000
Retained earnings
Balance, January 1, 2020
Net earnings
Balance, December 31, 2020
36,050
$
36,050
3. Prepare a statement of financial position at December 31, 2020.
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3/2/23, 11:46 PM
Assignment Print View
NUCLEAR COMPANY
Statement of Financial Position
As at December 31, 2020
Assets
Cash
$
25,600
Accounts receivable
12,600
Merchandise inventory
90,600
Equipment, net
45,600
Total assets
F
$
174,400
F
$
62,350
Liabilities and Shareholders’ Equity
Liabilities:
Accounts payable
$
Salary payable
60,050
2,300
Total liabilities
Shareholders' equity:
Contributed capital
$
Retained earnings
76,000
36,050
Total shareholders' equity
Total liabilities and shareholders' equity
112,050
F
F
$
174,400
4. This part of the question is not part of your Connect assignment.
Explanation:
1.
Income tax expense ($51,500 × 30%) = $15,450
3.
Because this is the first year of operations, the beginning balance of retained earnings is zero.
Retained earnings:
Ending RE
= Beginning RE + Net earnings – Dividends
= $0 + $36,050 − $0 = $36,050
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