ACCT.PRINCIPLES (LL)-PACKAGE
14th Edition
ISBN: 9781119707103
Author: Weygandt
Publisher: WILEY
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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.
a.Prepare the balance sheet and income statement by rearranging the above items.
b.In the process of constructing the balance sheet, please show me the total current assets, total assets, total current liabilities, and total liabilities.
c.In the process of constructing the income statement, please calculate the gross profit, operating profit (EBIT),taxable income and net profit.
Below are several transactions for Scarlet Knight Corporation. A junior accountant, recently employed by the company, proposes to record the following transactions.Required: Assess whether the junior accountant correctly proposes how to record each transaction. If incorrect, provide the correction.
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…
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