Question

Henry Josstick has just started his first accounting course and has prepared the following balance sheet and income statement for Omega Corp. Unfortunately, although the data for the individual items are correct, he is very confused as to whether an item should go in the balance sheet or income statement and whether it is an asset or liability. $ 57 70 Payables Less accumulated depreciation Total current assets Long-term debt Property, plant, and equipment Net fixed assets Total assets BALANCE SHEET $ 42 Inventories 127 Receivables Total current liabilities Interest expense Total liabilities Shareholders' equity Total liabilities and shareholders' equity $385 $ 32 $118 $ 770 615 45 INCOME STATEMENT Net sales Cost of goods sold Selling, general, and administrative expenses EBIT Debt due for repayment Cash Taxable income Taxes Depreciation Net income $ 32 22 $ 22 Prepare the balance sheet and income statement by rearranging the above items. (Be sure to list the assets and liabilities in order of their liquidity. Enter all amounts as positive values.) BALANCE SHEET Assets Liabilities and Shareholders' Equity

Answer 1

Amount $ 770 615 Income Statement : Particulars Net sales Less: Cost of goods sold Gross Profit Less: Selling general and administrative expenses Less: Depreciation expense EBIT Less: Interest expense ЕВТ Less: Taxes Net Income

Balance Sheet :: Assets Amount $ Current Assets : Cash Accounts Receivable Inventories Total Current Assets (A) Amount $ Liabilities and Shareholders Equity Current Liabilities : 22 Accounts Payable 70 Debt due for repayment 57 Total Current Liabilities 149 Non-Current Liabilities : Long term debt 385 459 Non-Current Assets: Property, Plant and Equipment Property, Plant and Equipment Less: Accumulated Depreciation Net Property, Plant and Equipment (B) 118 Total Liabilities (A) 555 Shareholders Equity : - (127) Shareholders Equity 428 Retained earnings Total Shareholders Equity (B) 577 Liabilities and Shareholders Equity (A+B) 118 Total Assets (A+B) 577