22 Feb Preparing an Income Statement, Statement of Retain
Preparing an Income Statement, Statement of Retained Earnings, and Balance Sheet The following information was reported in the December 31, 2007, financial statements of Southwest Airlines, Inc. (listed alphabetically, amounts in millions).Accounts Payable$1,731Other Assets$ 2,581Accounts Receivable845Other Liabilities3,107Aircraft Fuel Expense2,536Other Operating Expenses2,145Cash2,213Other Revenue336Contributed Capital2,153Property and Equipment10,874Dividends14Repairs and Maintenance Expense616Income Tax Expense413Retained Earnings (as of December 31, 2007)4,788Interest Expense69Salaries Expense3,213Landing Fees Expense560Supplies259Notes Payable4,993Ticket Revenues9,8611. Prepare an income statement for the year ended December 31, 2007.2. Prepare a statement of retained earnings for the year ended December 31, 2007. TIP: Assume the balance in retained earnings was $4,157 (million) at January 1, 2007.3. Prepare a balance sheet at December 31, 2007.4. Using the balance sheet, indicate whether the total assets of Southwest Airlines at the end of the year were financed primarily by liabilities or stockholders’ equity.