Question: The assets and liabilities of Oak Hill
The assets and liabilities of Oak Hill Garden Supply, Inc., as of December 31, 2018, and revenues and expenses for the year ended on that date are as follows:
Beginning retained earnings was $364,600, and dividends declared and paid totaled $107,000 for the year.
Requirements:
1. Prepare the income statement of Oak Hill Garden Supply, Inc., for the year ended December 31, 2018.
2. Prepare the company’s statement of retained earnings for the year.
3. Prepare the company’s balance sheet as of December 31, 2018.
4. Analyze Oak Hill Garden Supply, Inc., by answering these questions:
a. Was Oak Hill profitable during 2018? By how much?
b. Did retained earnings increase or decrease? By how much?
c. Which is greater, total liabilities or total stockholders’ equity? Who has a greater claim to Oak Hill’s assets: its creditors or its stockholders?
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