Question

Balance sheet. Use the data from the financial statements of a company shown below. Use it to answer the 7 questions that follow it. When answering the questions (filling in the blanks), DO NOT use dollar signs, USE commas to separate thousands, DO NOT use parenthesis to denote negative numbers, USE the negative sign and place it in front of first digit of your answer when your answer is a negative number. Round to the nearest dollar. Income Statement year ending 2016 Sales Revenues Cost of goods sold Fixed costs Selling, general, and administrative expenses Depreciation EBIT Interest expense Taxable Income Taxes Net Income S100,000 50,000 12,000 9,667 10,000 13.333 10,000 Tax rate 25% Dividens paid 2,000

Answer 1

Completing the 2016 Balance Sheet:

Assets		Liabilities
Current Assets		Current Liabilities
Cash	3,000	Notes Payables	2,000
Accounts Receivables	7,000	Accounts Payables	8,000
Inventories	10,000	Total Current Liabilities	10,000
Total Current Assets	20,000	Long-Term Debt	62,000
Gross Fixed Assets	180,000	Total Liabilities	72,000
Accumulated Depreciation	30,000	Owner’s Equity
Net Fixed Assets	150,000	Retained Earnings	28,000
Intangible Assets	0	Common Stock	70,000
Total Long-Term Assets	150,000	Total Owner’s Equity	98,000
Total Assets	170,000	Total Liabilities and Owner’s Equity	170,000

Notes:

1.Accumulated Depreciation in 2015 = 20,000

Depreciation for 2016 = 10,000

Accumulated Depreciation in 20165 = $30,000

2.Net Income of 2016= 10,000

Less: Dividends Paid = 2,000

Added to Retained Earnings in 2016= $8,000

Retained Earnings in the beginning = $20,000

Total Retained Earnings at the end of 2016 = $28,000

3.Accumulated Depreciation = 30,000

Net Fixed Assets = 150,000

Gross Fixed Assets = $180,000

Answers:

1.Amount of Total Assets in 2016 = $170,000

2. Total Liabilities and Owner’s Equity in 2016 = $170,000 (a balance sheet always tallies)

3.Changes in Retained Earnings = $8,000

4.Amount of Retained Earnings in 2016 = $28,000

5. Amount of Common Stock = 70,000

6.Amount of Owner’s Equity = $98,000

7. Amount of Long-Term Debt = Balancing figure = $62,000