Question

6 3 Problem 1 15 points Use the information below to construct a Balance Sheet using the correct format. Each line will be worth .5 points and each calculation will be worth 1 points. s Show your work in the cell to receive partial credit on the calculation portion. 7 Accounts Payable $80 & Accounts Receivable $160 9 Fixed Assets $740 10 Inventory $200 11 Long-term Debt $540 12 Additional Paid In Capital $215 13 Retained Earnings $500 14 Total Assets $1 675 15 Total Liabilities $675 16 Cash 17 Notes Payable 18 Par Common Stock 19 Total Current Assets 20 Total Current Liabilities 21 Total Equity 22 Total Liabilities & Equity

Answer 1

1			Balance sheet
						$	$
		Assets
	Current assets:
	Cash		(1675-740-200-160)			575
	(Balancing figure in the asset side)
	Accounts receivable					160
	Inventory					200
	Total current assets						935
	Fixed assets						740
	Total assets						1675
		Liabilities and equity
	Current liabilities:
	Accounts payable					80
	Total current liabilities						80
	Long-term liabilities:
	Long-term debt					540
	Notes payable			(595-540)		55
	(Balancing figure in the liabilities section)
	Total long-term liabilities			(675-80)			595
	Total liabilities						675
	Equity:
	Par common stock		(1000-215-500)			285
	(Balancing figure in the equity section)
	Additional paid in capital					215
	Retained earnings					500
	Total equity		(Total assets-Total liabilities)				1000
	Total liabilities and equity			(=Total assets)			1675
2			Income statement
					$	$
	Sales/Revenue					1750
	Less: Cost of goods sold					950
	Gross profit					800
	Less:Operating expenses
	Selling & Administrative expenses				400
	Depreciation				85
	Total operating expenses					485
	Operating income					315
	Less:Interest expense					75
	Taxable income					240
	Less:Taxes					127
	Net income					113