question archive The income statement for Tri-Con, Inc
The income statement for Tri-Con, Inc
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The income statement for Tri-Con, Inc., for the year ended December 31, 2012, was as follows:
Tri-Con, Inc.
Income Statement (selected items)
For the Year Ended December 31m 2012
Income from operations............... $148,000
Gain on sale of investments............ 12,000
Less unrealized loss on trading investments....... 34,000
Net income................... $126,000
The balance sheet dated December 31, 2011, showed a Retained Earnings balance of $614,000. During 2012, the company purchased trading investments for the first time at a cost of $166,000. In addition, trading investments with a cost of $45,000 were sold at a gain during 2012. The company paid $35,000 in dividends during 2012.
a. Determine the December 31, 2012, Retained Earnings balance.
b. Provide the December 31, 2012, balance sheet disclosure for Trading Investments.
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a. Retained earnings, December 31, 2011....................................... $614,000
Plus net income…………………………………………………......................... 126,000
............................................................................................................$740,000
Less dividends...................................................................................... 35,000
Retained earnings, December 31, 2012........................................ $705,000
b. Trading investments (at cost)......................................................... $121,000*
Less valuation allowance for trading investments........................... 34,000
Trading investments (at fair value)…………………………….................$.. 87,000
*$166,000 – $45,000
