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 SHEETPayables$39 Inventories$54 Less accumulated depreciation 124 Receivables 55 Total current assets Total current liabilities Long-term debt$370 Interest expense$29 Property, plant, and equipment 540 Total liabilities Net fixed assets Shareholders’ equity$106 Total assets Total liabilities and shareholders’ equity INCOME STATEMENTNet sales$740 Cost of goods sold 600 Selling, general, and administrative expenses 42 EBIT Debt due for repayment$29 Cash 19 Taxable income Taxes$19 Depreciation 16 Net income INCOME STATEMENTGA$GA$GA$000 Prepare the balance sheet and income statement by rearranging the above items. (Be sure to list the assets and liabilities in order oftheir liquidity. Enter all amounts as positive values.)Total current assetsNet fixed assetsTotal assetsAssets$$$BALANCE SHEETLiabilities and Shareholders' Equity0 Total current liabilitiesTotal liabilities00 Total liabilities and shareholders'equity$$000

Income statement is one of the financial statement which shows all incomes and all expenses of the…

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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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	$	39	Inventories	$	54
Less accumulated depreciation		124	Receivables		55
Total current assets			Total current liabilities
Long-term debt	$	370	Interest expense	$	29
Property, plant, and equipment		540	Total liabilities
Net fixed assets			Shareholders’ equity	$	106
Total assets			Total liabilities and shareholders’ equity

INCOME STATEMENT
Net sales	$	740
Cost of goods sold		600
Selling, general, and administrative expenses		42
EBIT
Debt due for repayment	$	29
Cash		19
Taxable income
Taxes	$	19
Depreciation		16
Net income

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.)
Total current assets
Net fixed assets
Total assets
Assets
$
$
$
BALANCE SHEET
Liabilities and Shareholders' Equity
0 Total current liabilities
Total liabilities
0
0 Total liabilities and shareholders'equity
$
$
0
0
0

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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