14BP Fill in the blank spaces with ca... [FREE SOLUTION]

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Foundations Of Financial Management

Stanley B. Block, Geoffrey A. Hirt, Bartley Danielsen

Business Studies

16th Edition 路 768 pages

ISBN: 9781259277160

Chapter 2: 14BP (page 50)

Fill in the blank spaces with categories 1 through 7:
1. Balance sheet (BS)
2. Income statement (IS)
3. Current assets (CA)
4. Fixed assets (FA)
5. Current liabilities (CL)
6. Long-term liabilities (LL)
7. Stockholders鈥� equity (SE)
Indicate whether item is on Balance sheet (BS) or Income statement (IS)
If on Balance sheet, designate which category
Item
Accounts receivable
Retained earnings
Income tax expense
Accrued expense
Cash
Selling and administrative expenses
Plant and equipment
Operating expenses
Marketable securities
Interest expense
Sales
Notes payable (6 month)
Bonds payable, maturity 2019
Common stock
Depreciation expense
Inventories
Capital in excess of par value
Net income (earning after tax)
Income tax payable

Short Answer

Expert verified

The balance sheet items are accounts receivable, retained earnings, accrued expenses, cash, plant and equipment, marketable securities, notes payable, bonds payable, common stock, inventories, capital in excess of par value, and income tax payable. And income tax expenses, selling and administrative expenses, operating expenses, interest expenses, sales, depreciation expenses, and net income are the income statement items.

Step by step solution

Balance sheet

A balance sheet is a component of the financial statements prepared by the management of the company to represent the financial position of the company.

Categorization of balance sheet items

Indicate whether the item is on the balance sheet (BS) or income statement (IS)	If on the balance sheet, designate which category	Item
Balance sheet	Current asset	Accounts receivable
Balance sheet	Stockholder鈥檚 equity	Retained earnings
Income statement	-	Income tax expense
Balance sheet	Current liability	Accrued expense
Balance sheet	Current asset	Cash
Income statement	-	Selling and administrative expenses
Balance sheet	Fixed asset	Plant and equipment
Income statement	-	Operating expenses
Balance sheet	Current assets	Marketable securities
Income statement	-	Interest expense
Income statement	-	Sales
Balance sheet	Current liability	Notes payable (6 months)
Balance sheet	Long term liability	Bonds payable, maturity 2019
Balance sheet	Stockholder鈥檚 equity	Common stock
Income statement	-	Depreciation expense
Balance sheet	Current asset	Inventories
Balance sheet	Stockholder鈥檚 equity	Capital in excess of par value
Income statement	-	Net income (earnings after tax)
Balance sheet	Current liability	Income tax payable

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JONES CORPORATION
Current assets		Liabilities
Cash	\(20,000	Accounts payable	\)100,000
Accounts receivable	80,000	Bonds payable (long term)	80,000
Inventory	50,000
Long Term Assets		Stockholder鈥檚 Equity
Fixeed assets	\(500,000	Common Stock	\)150,000
Less: Accumulated Depreciation	(150,000)	Paid in capital	70,000
Net fixed assets*	350,000	Retained earnings	100,000
Total assets	\(500,000	Total Liab. And equity	\)500,000

JONES CORPORATION
Sales (on credit)	\(1,250,000
Cost of goods sold	750,000
Gross profit	\)500,000
Selling and administrative expenses	257,000
Less: depreciation expenses	50,000
Operating profits	\(193,000
Interest expenses	8,000
Earning before taxes	\)185,000
Tax expenses	92,500
Net income	\(92,500

SMITH CORPORATION
Current assets		Liabilities
Cash	\(35,000	Accounts payable	\)75,000
Marketable securities	7,500	Bonds payable (long term)	210,000
Accounts receivable	70,000
Inventory	75,000
Long term assets		Stockholder鈥檚 equity
Fixed assets	\(500,000	Common stock	\)75,000
Less: accumulated depreciation	250,000	Paid in capital	30,000
Net fixed assets*	250,000	Retained earnings	47,500
Total assets	\(437,500	Total liab. And equity	\)437,500

SMITH CORPORATION
Sales (on credit)	\(1,000,000
Cost of goods sold	600,000
Gross profit	\)400,000
Selling and administrative expenses	224,000
Less: depreciation expenses	50,000
Operating profits	\(126,000
Interest expenses	21,000
Earning before taxes	\)105,000
Tax expenses	52,500
Net income	\(52,500

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Short Answer

Step by step solution

Balance sheet

Categorization of balance sheet items

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Indicate whether item is on Balance sheet (BS) or Income statement (IS)	If on Balance sheet, designate which category	Item
		Accounts receivable
		Retained earnings
		Income tax expense
		Accrued expense
		Cash
		Selling and administrative expenses
		Plant and equipment
		Operating expenses
		Marketable securities
		Interest expense
		Sales
		Notes payable (6 month)
		Bonds payable, maturity 2019
		Common stock
		Depreciation expense
		Inventories
		Capital in excess of par value
		Net income (earning after tax)
		Income tax payable