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One of the key outcomes of our course is to understand financial statements, how

ID: 2568241 • Letter: O

Question

One of the key outcomes of our course is to understand financial statements, how they are structured and what is included in them. Below you will find a list of items that might appear on a balance sheet or income statement. Your assignment is to do the following:

Open the Balance Sheet and Income Statement files

Identify where each item on list below goes on either the balance sheet or income statement.

Insert the item name and the amount in the proper place on the appropriate financial statement.  

Make appropriate calculations where needed.

1)I have put an asterisk (*) on each place on the balance sheet and income statement where an item is needed.

2)Some totals are given and that should help you make sure that you have placed items in the correct place and calculated correctly.  

3)Gross profit should compute to 30%.

Accumulated Depreciation                                                                    30,800                         

Buildings                                                                                                     110,000

Cash                                                                                                                  4,400

Depreciation Expense                                                                              11,000

Common Stock                                                                                           57,200

Purchases, Net                                                                                         303,600

Inventory, Beginning of year                                                                 19,800

Total Stockholder’s Equity                                                                     77,000         

Net Other income (Expense)                                                                (2,200)

Beginning Balance, Retained Earnings                                              11,000

Dividends                                                                                                        4,400

Accounts Payable                                                                                      13,200

Corporate Income Tax Expense                                                              4,400

Accounts Receivable                                                                                   6,600

Telephone Expense                                                                                  15,400

Costs of Goods Sold                                                                               308,000

Machinery and Equipment                                                                    26,400         

Ending Balance, Retained Earnings                                                     19,800

Mortgage payable                                                                                     41,800

Revenue                                                                                                     440,000

Wages Expenses                                                                                        63,800

Advertising Expense                                                                                 22,000

Inventory, End of Year                                                                             15,400

$

ASSETS Current Assets * * * Total Current Assets $ Fixed Assets * * * Net Fixed Assets $      TOTAL ASSETS $ LIABILITIES & STOCKHOLDERS' EQUITY Current Liabilities * Total Current Liabilities $ *Long-term Debt TOTAL LIABILITIES $ Stockholders' Equity * * Total Stockholders' Equity $ TOTAL LIABILITIES & EQUITY

$

Explanation / Answer

Balance Sheet $ $ Assets Current assets Cash 4400 Accounts receivable 6600 Inventory 15400 Total current assets 26400 Fixed assets Machinery and Equipment 26400 Building 110000 Accumulated depreciation -30800 105600 Total fixed assets 105600 Total assets 132000 Liabilities & stockholders' equity Liabilities Current Liabilities Accounts payable 13200 Total current liabilites 13200 Long-term liabilites Mortgage payable 41800 Total Long-term Liabilities 41800 Stockholders' equity Common stock 57200 Retained earnings 19800 Total stockholders' equity 77000 Total Liabilities & stockholders' equity 132000

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