Henry Josstick has just started his first accountingcourse and has prepared the following balancesheet and income statement for OmegaCorporation. Unfortunately, although the data forthe individual items are correct, he is veryconfused as to whether an item should go in thebalance sheet or income statement and whether itis an asset or liability. BALANCE SHEET Payables $35 Inventories $ 50 Less accumulated depreciation120 Receivables 35 Total current assets Totalcurrent liabilities Long-term debt $ 350 Interestexpense $25 Property, plant, and equipment 520Total liabilities Net fixed assets Shareholders'equity $90 Total assets Total liabilities andshareholders' equity INCOME STATEMENT Netsales $700 Cost of goods sold 580 Selling, general,and administrative expenses 38 EBIT Debt due forrepayment $ 25 Cash 15 Taxable income Federalplus other taxes $ 15 Depreciation 12 Net incomePrepare the balance sheet and income statementby rearranging the above items. Note: Be sure tolist the assets and liabilities in order of theirliquidity. Enter all amounts as positive values.

Step 1: Preparation of Balance Sheet…

Answered: Henry Josstick has just started his…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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