FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Practice Problem Below are the
December 31 2007 2006
Cash $ 29,700 $ 10,200
Inventory 39,000 42,000
Long-term investments 0 15,000
Plant Assets, net of
Total Assets $303,000 $212,500
Accounts payable $ 16,000 $ 26,500
Accrued liabilities 28,000 17,000
Long-term notes payable 40,000 50,000
Common stock 150,000 90,000
Total Liabilities and Owner’s Equity $303,000 $212,500
Year ended December 31, 2007
Sales Revenue $340,000
Cost of Goods Sold (200,000)
Operating Expenses (58,400)
Depreciation Expense (10,600)
Gain on sale of investments 4,000
Net Income $ 75,000
Additional information:
A) In 2007, Major, Inc didn’t sell plant asset and didn’t purchase additional investment.
B) In 2007, no shares were repurchased and no new debt was issued.
1. Prepare the Statement of
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