Henry Josstick has just started his first accounting course and has prepared the

Question

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 Less accumulated depreciation Total current assets $ 48 133 $ 63 100 Inventories Receivables Total current liabilities Interest expense Total liabilities Shareholders' equity Total liabilities and shareholders equity Long-term debt Property, plant, and equipment Net fixed asset:s $415 585 $ 38 142 Total assets INCOME STATEMENT Net sales Cost of goods sold Selling, general, and administrative expenses EBIT Debt due for repayment Cash Taxable income Taxes Depreciation Net income $830 645 51 5 38 28 5 28 25 Prepare the balance sheet and income statement by rearranging the above items. (Be sure to list the assets and liabilities in order of their liquidity. Enter all amounts as positive values.) BALANCE SHEET Assets Liabilities and Shareholders' Equity Total current assets Total current liabilities Total liabilities Net fixed assets Total assets Total liabilities and shareholders'equity INCOME STATEMENT

Explanation / Answer

BALANCE SHEET Assets Liabilities and Shareholders' Equity Cash 28 Payables 48 Receivables 100 Debt due for repayment 38 Inventories 63 Total Current Assets 191 Total Current Liabilites 86 Property , Plant and Equipment 585 Long term debt 415 Less: Accumulated Depreciation 133 Total Liabilities 501 Net fixed Assets 452 Shareholders Equity 142 Total Assets 643 Total liabilities Shareholders Equity 643 INCOME STATMENT Net sales 830 Cost of goods sold 645 Selling , general and administrative expenses 51 Depreciation 25 EBIT 109 Interest Expense 38 Taxable Income 71 Taxes 28 Net Income 43

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