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. BALANCE SHEET Payables $ 39 Inventories $ 54 Less accumulated depreciation 124 Receivables 55 Total current assets Total current liabilities Long-term debt $ 370 Interest expense $ 29 Property, plant, and equipment 540 Total liabilities Net fixed assets Shareholders’ equity $ 106 Total assets Total liabilities and shareholders’ equity INCOME STATEMENT Net sales $ 740 Cost of goods sold 600 Selling, general, and administrative expenses 42 EBIT Debt due for repayment $ 29 Cash 19 Taxable income Taxes $ 19 Depreciation 16 Net income
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. BALANCE SHEET Payables $ 39 Inventories $ 54 Less accumulated depreciation 124 Receivables 55 Total current assets Total current liabilities Long-term debt $ 370 Interest expense $ 29 Property, plant, and equipment 540 Total liabilities Net fixed assets Shareholders’ equity $ 106 Total assets Total liabilities and shareholders’ equity INCOME STATEMENT Net sales $ 740 Cost of goods sold 600 Selling, general, and administrative expenses 42 EBIT Debt due for repayment $ 29 Cash 19 Taxable income Taxes $ 19 Depreciation 16 Net income
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter12: Fainancial Statement Analysis
Section: Chapter Questions
Problem 13MCQ
Related questions
Question
Henry Josstick has just started his first accounting course and has prepared the following
BALANCE SHEET | |||||||
Payables | $ | 39 | Inventories | $ | 54 | ||
Less accumulated |
124 | Receivables | 55 | ||||
Total current assets | Total current liabilities | ||||||
Long-term debt | $ | 370 | Interest expense | $ | 29 | ||
Property, plant, and equipment | 540 | Total liabilities | |||||
Net fixed assets | Shareholders’ equity | $ | 106 | ||||
Total assets | Total liabilities and shareholders’ equity | ||||||
INCOME STATEMENT | |||
Net sales | $ | 740 | |
Cost of goods sold | 600 | ||
Selling, general, and administrative expenses | 42 | ||
EBIT | |||
Debt due for repayment | $ | 29 | |
Cash | 19 | ||
Taxable income | |||
Taxes | $ | 19 | |
Depreciation | 16 | ||
Net income | |||
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,
Survey of Accounting (Accounting I)
Accounting
ISBN:
9781305961883
Author:
Carl Warren
Publisher:
Cengage Learning