Gross Sales Year 1: $2,400,000 Year 2: $2,600,000 Sales Returns 45,000 40,000 Co

Question

Gross Sales Year 1: $2,400,000    Year 2: $2,600,000
Sales Returns           45,000                     40,000
Cost of goods sold    1,650,000                 1,800,000
Operating expense   375,000                    405,000
Cash                        250,000                    275,000
Accounts receivable  450,000                    460,000
Prepaid expenses      200,000                    210,000
Furniture & Fixtures  310,000                   330,000
Long-term debt         400,000                   400,000
Accrued expenses      180,000                   190,000
Income taxes payable  93,750                   101,250
Stockholders' equity    536,250                   583,750

Use the above information to calculate net income, total assets, and total liabilities for year 1.

Explanation / Answer

Net income (2,400,000- 45,000-1,650,000-375,000= 330,000) Assets (250,000+ 450,000+ 200,000+ 310,000= 1,210,000) Liabilities (180,000+ 93,750 + 400,000= 673,750)

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