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# The Apricot Company

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Create the following balance sheet for the years 2001 and 2002.

The Apricot Company in 2001 had notes payable of \$1,200, accounts payable of \$2,400, and long term debt of \$3,000. In 2002 the notes payable was \$1,600, accounts payable was \$2,000 and long term debt was \$2,800. For assets, Apricot had in 2001 \$800 in cash, \$400 in marketable securities, and \$1,800 in inventory. In 2002 they had \$500 in cash, \$300 in marketable securities, and \$2,000 in inventory. Accounts receivable at the end of 2001 were \$900 and \$800 at the end of 2002. Apricot's net plant and equipment was \$6,000 in 2001 and \$8,000 in 2002.

**Based on the information for Apricot Company they had sales of \$1,000 in 2002 and cost of goods sold of \$400. Depreciation was \$100, and they paid \$160 of interest. The tax rate is 25% and all taxes are paid currently. What is Apricot's net income for 2002?

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#### Solution Preview

First you need to separate the assets and liabilities given for each year and put them into the balance format. As the total assets is equal to total liabilities plus total owner's equity, the difference between the total assets and total liabilities will be the total owner's equity amount.

Apricot Company
Balance Sheet
For the year ended December 31, 2001

Assets Liabilities and Owner's ...

#### Solution Summary

This solution is comprised of a detailed explanation to answer what is Apricot's net income for 2002 and create the balance sheet for the years 2001 and 2002.

\$2.19