Question

Consider the following income statement for the Heir Jordan Corporation: HEIR JORDAN CORPORATION Income Statement Sales $43,500 Costs 34,100 Taxable income Taxes (24%) $ 9,400 2,256 Net income $ 7,144 Dividends Addition to retained earnings $4,000 3,144 The balance sheet for the Heir Jordan Corporation follows. Based on this information and the income statement, supply the missing information using the percentage of sales approach. Assume that accounts payable vary with sales, whereas notes payable do not. (Leave no cells blank - be certain to enter "0" whenever the item is not a constant percentage of sales. Enter each answer as a percent rounded 2 decimal places, e.g., 32.16.)

Answer 1

Answer : Percentage of Sales can be calculated by particular item divided by sales and multiplied it by so percentage of sales = Particular item Sales x 10o. Creeper's equity Amount Heir Jordan Corporation Balance sheet % of Assets "1.08 Amount Liabilities & sales sales Current assets Current Liabilities Cash 2550 5.86% Account Payable 2400 5.52% Account Receinable 3800 8.74% Noles payable 5100 Inventory 900 20.690/ Total 7500 Total 15350 35.297. Long termdekt 24000 fixed assets Owner's Equity Common stock 16000 o Net Plant & 38000 87.36% Retained Equipment o O со Earnings 5850 o Total 53350 122.65% Tool 53350122.654

Note-:

Note payable, long term debt and all owner's equity did not vary with sales, so percentage of sales regarding these items cannot be determined.

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