Financial Statements. 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. Help him by rearranging the items and filling in the blanks. BALANCE SHEET
Payables 35 Inventories 50
Less accumulated depreciation 120 Receivables 35
Total current assets _ Total current liabilities _
Long-term debt 350 Interest expense 25
Property, plant, and equipment 520 Total liabilities _
Net fixed assets _ Shareholders’ equity 90
Total assets _ Total liabilities and shareholders’ equity_
INCOME STATEMENT
Net sales 700
Cost of goods sold 580
Selling, general, and administrative expenses 38
EBIT
Debt due for repayment 25
Cash 15
Taxable income
Taxes 15
Depreciation 12
Net income -
What is the correct total for the following?
a. Current assets
b. Net fixed assets
c. Total assets
d. Current liabilities
e. Total liabilities
f. Total liabilities and shareholders’ equity
g. EBIT
h. Taxable income
i. Net income

Omega Corp.

The correct totals for the following:

a. Current assets = $100

b. Net fixed assets = $400

c. Total assets = $500

d. Current liabilities = $60

e. Total liabilities = $410

f. Total liabilities and shareholders’ equity = $500

g. EBIT = $70

h. Taxable income = $45

i. Net income = $30

Explanation:

a) Data and Calculations:

BALANCE SHEET

Cash                                             $15

Receivables                                   35

Inventories                                    50  

Total current assets                                         $100

Property, plant, and equipment 520

Less accumulated depreciation 120  

Net fixed assets                                             $400

Total assets                                                   $500

Liabilities and Equity

Payables                                     $35  

Debt due for repayment             25

Total current liabilities                                   $60

Long-term debt                                             350

Total liabilities                                              $410

Shareholders’ equity                                      90

Total liabilities and shareholders’ equity $500

INCOME STATEMENT

Net sales                          $700

Cost of goods sold            580

Gross profit                        120

Selling, general, and

 administrative expenses 38

Depreciation                       12

EBIT                                    70

Interest expense               25

Taxable income                 45

Taxes                                  15  

Net income                        30

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