Question

Creating Balance Sheets and Income Statements
Using the information in the below table, prepare a classified balance sheet for Arrow Company as of December 31, 2014 and December 31, 2015, along with multi-step income statements for the years then ended.

Account		December 31, 2014	December 31, 2015
Property, plant, and equipment (net)		$650	$735
Long-term debt		490	690
Depreciation expense		50	60
Retained earnings		130	295
Sales revenue		1,000	1,500
Income taxes		50	70
Current portion of long-term debt		50	70
Total current liabilities		130	160
Inventory		125	300
Cost of goods sold		600	900
Cash		100	140
Selling, general, and administrative expenses		175	290
Other current assets		40	40
Accounts receivable		135	230
Interest expense		25	50
Dividends		20	25
Accounts payable		80	90
Common stock		300	300

Arrow Company
Balance Sheet
As of December 31, 2015
		2015	2014
Cash		$	$
Accounts Receivable
Common stockCurrent portion of long-term debtDepreciation expenseDividendsIncome taxesInterest expenseInventoryLong-term debtNet incomeOperating incomeProperty, plant and equipmentSales
Other current assets
Total current assets
Common stockCurrent portion of long-term debtDepreciation expenseDividendsIncome taxesInterest expenseInventoryLong-term debtNet incomeOperating incomeProperty, plant and equipmentSales
Total assets		$	$
Accounts payable		$	$
Common stockCurrent portion of long-term debtDepreciation expenseDividendsIncome taxesInterest expenseInventoryLong-term debtNet incomeOperating incomeProperty, plant and equipmentSales
Total current liabilities
Common stockCurrent portion of long-term debtDepreciation expenseDividendsIncome taxesInterest expenseInventoryLong-term debtNet incomeOperating incomeProperty, plant and equipmentSales
Total liabilities
Common stockCurrent portion of long-term debtDepreciation expenseDividendsIncome taxesInterest expenseInventoryLong-term debtNet incomeOperating incomeProperty, plant and equipmentSales
Retained earnings
Total equity
Total liabilities and equity		$	$

Arrow Company
Income Statement
For the year ended December 31, 2015
		2015	2014
Common stockCurrent portion of long-term debtDepreciation expenseDividendsIncome taxesInterest expenseInventoryLong-term debtNet incomeOperating incomeProperty, plant and equipmentSales		$	$
Cost of goods sold
Gross profit
Selling, general, & administrative expenses
Common stockCurrent portion of long-term debtDepreciation expenseDividendsIncome taxesInterest expenseInventoryLong-term debtNet incomeOperating incomeProperty, plant and equipmentSales
Common stockCurrent portion of long-term debtDepreciation expenseDividendsIncome taxesInterest expenseInventoryLong-term debtNet incomeOperating incomeProperty, plant and equipmentSales
Common stockCurrent portion of long-term debtDepreciation expenseDividendsIncome taxesInterest expenseInventoryLong-term debtNet incomeOperating incomeProperty, plant and equipmentSales
Pretax income
Common stockCurrent portion of long-term debtDepreciation expenseDividendsIncome taxesInterest expenseInventoryLong-term debtNet incomeOperating incomeProperty, plant and equipmentSales
Common stockCurrent portion of long-term debtDepreciation expenseDividendsIncome taxesInterest expenseInventoryLong-term debtNet incomeOperating incomeProperty, plant and equipmentSales

Creating Balance Sheets and Income Statements Using the information in the below table, prepare a classified balance sheet for Arrow Company as of December 31, 2014 and December 31, 2015, along with multi-step income statements for the years then ended December 31, 2014 December 31, 2015 Account Property, plant, and equipment (net) $650 $735 490 690 Long-term debt Depreciation expense 50 60 Retained earnings 130 295 Sales revenue 1,000 1,500 50 70 Income taxes 70 Current portion of long-term debt 50 Total current liabilities 130 160 125 300 Inventory Cost of goods sold 900 600 Cash 100 140 Selling, general, and administrative expenses 175 290 Other current assets 40 40 Accounts receivable 135 230 Interest expense 50 25 Dividends 20 25 Accounts payable 80 90 Common stock 300 300 Balance Sheet As of December 31, 2015 2015 2014 140 100 Cash Accounts Receivable 230 135 300 125 Inventory 40 40 Other current assets Total current assets 400 710 735 650 Property, plant and equipment 1,445 $ 1,050 Total assets Accounts payable 90 80 70 50 Current portion of long-term debt Total current liabilities 160 130 690 490 Long-term debt Total liabilities 850 620 Common stock 300 300 X 295 1,300 Retained earnings 295 1,300 Retained earnings X Total equity 595 1,600 X $ 2,220 1,445 Total liabilities and equity Arrow Company Income Statement For the year ended December 31, 2015 2015 2014 Sales $ 1,500 1,000 900 600 Cost of goods sold Gross profit 600 400 Selling, general, & administrative expenses 290 175 50 60 Depreciation expense Operating income 50 25 X 25 20 Interest expense X Pretax income 175 130 50 70 Income taxes 80 105 Net income

Answer 1

Answer:

Balance Sheet
	2015	2014
Cash	$           140	$           100
Accounts receivable	$           230	$           135
Inventoy	$           300	$           125
Other current assets	$             40	$             40
Total current assets	$           710	$           400
Property, plant and equipment	$           735	$           650
Total assets	$       1,445	$       1,050
Accounts payable	$             90	$             80
Current portion of long term debt	$             70	$             50
Total current liabilities	$           160	$           130
Long term debt	$           690	$           490
Total liabilities	$           850	$           620
Common stock	$           300	$           300
Retained earnings	$           295	$           130
Retained earnings	$           295	$           130
Total equity	$           595	$           430
Total liabilities and equity	$       1,445	$       1,050
Income Statement
	2015	2014
Sales	$       1,500	$       1,000
Cost of goods sold	$           900	$           600
Gross profit	$           600	$           400
Sales, general & administration overheads	$           290	$           175
Depreciation expense	$             60	$             50
Operating income	$           250	$           175
Interest expense	$             50	$             25
Pretax income	$           200	$           150
Income taxes	$             70	$             50
Net income	$           130	$           100

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