Consider the following income statement for the Heir Jordan Corporation: HEIR JORDAN CORPORATION Income Statement Sales $ 47,600 Costs 35,600 Taxable income $ 12,000 Taxes (25%) 3,000 Net income $ 9,000 Dividends $ 3,000 Addition to retained earnings 6,000 The balance sheet for the Heir Jordan Corporation follows. Based on this information and the income statement, supply the missing information using the percentage of sales approach. Assume that accounts payable vary with sales, whereas notes payable do not. (Leave no cells blank - be certain to enter "0" whenever the item is not a constant percentage of sales. Enter each answer as a percent rounded 2 decimal places, e.g., 32.16.) HEIR JORDAN CORPORATION Balance Sheet Percentage of Sales Percentage of Sales Assets Liabilities and Owners’ Equity Current assets Current liabilities Cash $2,050 Accounts payable $2,400 Accounts receivable 4,700 Notes payable 4,500 Inventory 6,400 Total $13,150 Total $6,900 Long-term debt $25,000 Fixed assets Owners’ equity Net plant and equipment $36,000 Common stock and paid-in surplus $15,000 Retained earnings 2,250 Total $17,250 Total assets $49,150 Total liabilities and owners’ equity $49,150

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Consider the following income statement for the Heir Jordan Corporation:

HEIR JORDAN CORPORATION Income Statement
Sales			$	47,600
Costs				35,600

Taxable income			$	12,000
Taxes (25%)				3,000

Net income			$	9,000

Dividends	$	3,000
Addition to retained earnings		6,000

The balance sheet for the Heir Jordan Corporation follows. Based on this information and the income statement, supply the missing information using the percentage of sales approach. Assume that accounts payable vary with sales, whereas notes payable do not. (Leave no cells blank - be certain to enter "0" whenever the item is not a constant percentage of sales. Enter each answer as a percent rounded 2 decimal places, e.g., 32.16.)

HEIR JORDAN CORPORATION
Balance Sheet
		Percentage of Sales			Percentage of Sales
Assets			Liabilities and Owners’ Equity
Current assets			Current liabilities
Cash	$2,050		Accounts payable	$2,400
Accounts receivable	4,700		Notes payable	4,500
Inventory	6,400
Total	$13,150		Total	$6,900
			Long-term debt	$25,000
Fixed assets			Owners’ equity
Net plant and equipment	$36,000		Common stock and paid-in surplus	$15,000
			Retained earnings	2,250
			Total	$17,250
Total assets	$49,150		Total liabilities and owners’ equity	$49,150

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