Q1-1 Prepare a Balance Sheet Prepare a balance sheet for the NMB company as of December 2020, based on the following information: cash = $110,000; patents and copyrights = $750,000, accounts payable = $200,000, accounts receivable = $300,000; tangible net fixed assets = $2,000,000; inventory = $400,000; notes payable= $300,000; accumulated retained earnings = $2,500,000; long-term debt = $175,000. Q2-2: Using Income statement Given the following information, calculate the depreciation expense; sales = 10,000, costs = 6000, additions to retained earnings = 1000; dividend paid = 625; interest expense = 500; tax rate = 35 percent.
A balance sheet and an income statement are both important financial statements that provide information about a company's financial health and performance.
A balance sheet is a snapshot of a company's financial position at a given point in time. It lists the company's assets, liabilities, and equity. Assets are things that a company owns that have value, such as cash, investments, and property. Liabilities are debts that the company owes, such as loans and bills. Equity represents the value that is left over after liabilities are subtracted from assets and represents the owners' stake in the company. The balance sheet equation is Assets = Liabilities + Equity.
An income statement, on the other hand, is a record of a company's financial performance over a period of time, such as a month or a year. It shows how much revenue the company generated, how much it spent on expenses, and what its net income was for the period. The income statement is useful for understanding a company's profitability and its ability to generate cash flow.
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