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Using Financial Statements for 2020, average daily sales for the year 2020 is 1,452.05. TRUE OR FALSE?

Using Financial Statements for 2020, average daily sales for the year 2020 is 1,452.05. TRUE OR FALSE?

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Question 98

Using Financial Statements for 2020, average daily sales for the year 2020 is 1,452.05.

TRUE OR FALSE?

**Balance Sheet and Income Statement Overview (2020)** **Balance Sheet** *Assets:* - **Cash:** $280,000 - **Accounts Receivable:** $117,600 - **Inventory:** $89,600 - **Prepaid Expenses:** $14,000 - **Total Current Assets:** $501,200 - **Fixed Assets:** $33,600 - **Total Assets:** $534,800 *Liabilities & Equity:* - **Current Liabilities:** - Accounts Payable: $90,916 - Notes Payable: $48,132 - Accrued Expenses: $42,784 - Taxes Payable: $37,436 - Deferred Taxes: $48,132 - **Total Current Liabilities:** $267,400 - **Long-Term Notes:** $123,004 - **Total Liabilities:** $390,404 - **Equity:** - Capital Stock: $53,480 - Retained Earnings: $90,916 - **Total Equity:** $144,396 - **Total Liabilities & Equity:** $534,800 **Income Statement** - **Sales:** $530,000 - **Cost of Goods Sold:** $148,400 - **Gross Profit:** $381,600 - **Interest Income:** $53,200 - **Total Income:** $434,800 *Expenses:* - Sales Salaries: $121,900 - Office Salaries: $26,500 - Office Equipment Rental: $37,100 - Interest Expense: $15,900 - General & Administrative: $4,770 - **Total Expenses:** $206,170 - **Income Before Tax:** $228,430 - **Income Taxes:** $132,500 - **Net Income:** $95,930 This balance sheet and income statement provide a snapshot of the financial health and performance of the company for the year 2020. The balance sheet outlines the company's assets and how they were financed, either through liabilities or equity. The income statement details the revenues and expenses to show the net income.
Transcribed Image Text:**Balance Sheet and Income Statement Overview (2020)** **Balance Sheet** *Assets:* - **Cash:** $280,000 - **Accounts Receivable:** $117,600 - **Inventory:** $89,600 - **Prepaid Expenses:** $14,000 - **Total Current Assets:** $501,200 - **Fixed Assets:** $33,600 - **Total Assets:** $534,800 *Liabilities & Equity:* - **Current Liabilities:** - Accounts Payable: $90,916 - Notes Payable: $48,132 - Accrued Expenses: $42,784 - Taxes Payable: $37,436 - Deferred Taxes: $48,132 - **Total Current Liabilities:** $267,400 - **Long-Term Notes:** $123,004 - **Total Liabilities:** $390,404 - **Equity:** - Capital Stock: $53,480 - Retained Earnings: $90,916 - **Total Equity:** $144,396 - **Total Liabilities & Equity:** $534,800 **Income Statement** - **Sales:** $530,000 - **Cost of Goods Sold:** $148,400 - **Gross Profit:** $381,600 - **Interest Income:** $53,200 - **Total Income:** $434,800 *Expenses:* - Sales Salaries: $121,900 - Office Salaries: $26,500 - Office Equipment Rental: $37,100 - Interest Expense: $15,900 - General & Administrative: $4,770 - **Total Expenses:** $206,170 - **Income Before Tax:** $228,430 - **Income Taxes:** $132,500 - **Net Income:** $95,930 This balance sheet and income statement provide a snapshot of the financial health and performance of the company for the year 2020. The balance sheet outlines the company's assets and how they were financed, either through liabilities or equity. The income statement details the revenues and expenses to show the net income.
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= Annual Sales / Number of days in a year

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