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Unformatted text preview: 2-2A. Sharpe Mfg. CompanyBalance SheetDecember 31, 2003ASSETSCash$ 96,000Accounts receivable120,000 Inventory110,000Total current assets$ 326,000 Machinery and equipment $ 700,000 Accumulated depreciation(236,000)Net fixed assets464,000Total assets$ 790,000LIABILITIES & EQUITYLiabilitiesCurrent LiabilitiesNotes payable$ 100,000 Accounts payable90,000Total current liabilities$ 190,000 Long-term debt160,000Total liabilities$ 350,000 EquityCommon stock$ 320,000Retained earningsPrior year100,000Current year20,000Total equity$ 440,000Total liabilities and equity$ 790,000Sharpe Mfg. CompanyIncome StatementFor the Year Ended December 31, 2003Sales$ 800,000 Cost of goods sold500,000Gross profits$ 300,000 Operating expense280,000Net income$ 20,000(Assume no interest accrued or taxes)2-4A.Potts, Inc. - Corporate Income TaxSales$ 6,000,000Cost of goods sold and cash operating expenses5,600,000Operating profit$ 400,000Interest expense30,000Taxable Income$ 370,000Tax Liability:$50,000 x 0.15 =$7,500...
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This note was uploaded on 07/06/2011 for the course ECON 104 taught by Professor Ismailov during the Spring '11 term at London College of Accountancy.
- Spring '11