Consider the following income statement for the Heir Jordan Corporation: HEIR JO

Question

Consider the following income statement for the Heir Jordan Corporation: HEIR JORDAN CORPORATION Income Statement Sales $ 48,200 Costs 34,000 Taxable income Taxes (35%) $ 14,200 4,970 Net income $ 9,230 Dividends Addition to retained earnings $ 2,600 6,630 The balance sheet for the Heir Jordan Corporation follows. Based on this information and the income statement, supply the missing information using the percentage of sales approach. Assume that accounts payable vary with sales, whereas notes payable do not. (Leave no cells blank - be certain to enter "0" whenever the item is not a constant percentage of sales. Enter each answer as a percent rounded 2 decimal places, e.g., 32.16.) HEIR JORDAN CORPORATION Balance Sheet Percentage of Sales Percentage of Sales Assets Liabilities and Owners' Equity Current liabilities Current assets Cash Accounts receivable Inventory $ 2,350 5,300 9,000 Accounts payable Notes payable $ 4,000 8,200 Total $ 16,650 Total $ 12,200 $ 21,000 Long-term debt Owners' equity Common stock and paid-in surplus Retained earnings $ 12,000 8,650 Fixed assets Net plant and equipment $ 37,200 Total $ 20,650 Total assets $ 53,850 Total liabilities and owners' equity $ 53,850

Explanation / Answer

HEIR JORDAN CORPORATION

BALANCE SHEET

Assets Amount($) Percentage of sales (%) Liabilities and shareholders equity Amount($) Percentage of sales (%) Current assets: Current liabilities: Cash $2350 4.87% Accounts payable $4000 8.29% Accounts receivable $5300 11% Notes payable $8200 Inventory $9000 18.67% Total $16650 34.54% Total $12200 Fixed assets: long term debt $21000 Net plant and equipment $37200 77.17% Owners equity: Common stock and paid in surplus $12000 Retained earnings $8650 Total share holders equity $20650 Total assets $53850 111.72% Total liabilities and shareholders equi $53850

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