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Sharpe Mfg. Co.

1. Review of financial statements) Prepare a balance sheet and income statement as of December 31, 2003, for the Sharpe Mfg. Co. from the following information.

Accounts receivable $120,000
Machinery and equipment 700,000
Accumulated depreciation 236,000
Notes payable 100,000
Net sales 800,000
Inventory 110,000
Accounts payable 90,000
Long-term debt 160,000
Cost of goods sold 500,000
Operating expenses 280,000
Common stock 320,000
Cash 96,000
Retained earningsâ?"prior year 100,000
Retained earningsâ?"current year ?

2. Your firm has the following income statement items: sales of $50,250,000; income tax of $1,744,000; operating expenses of $10,115,000; cost of goods sold of $35,025,000; and interest expense of $750,000. What is the amount of the firmâ??s income before tax?

a. $4,360,000
b. $750,000
c. $10,865,000
d. $25,115,000

3. Your firm has the following income statement items: sales of $50,250,000; income tax of $1,744,000; operating expenses of $10,115,000; cost of goods sold of $35,025,000; and interest expense of $750,000. What is the amount of the firmâ??s gross profit?

a. $18,000,000
b. $15,225,000
c. $5,000,110
d. $6,632,000

4. Your firm has the following balance sheet statement items: total current liabilities of $805,000; total assets of $2,655,000; fixed and other assets of $1,770,000; and long-term debt of $200,000. What is the amount of the firmâ??s total current assets?

a. $885,000
b. $1,550,000
c. $600,000
d. $325,000

Use the following information to answer the questions. A friend of yours is trying to determine whether to open a sandwich stand at the local mall based on the following data. She expects total fixed costs per year of $24,000, a sale price per sandwich of $3.00, and variable costs per sandwich of $1.80.

5. The break-even level of output for this endeavor is:
a. 12,000.
b. 16,000.
c. 20,000.
d. 24,000.

6. The break-even point in sales dollars is:
a. $60,000.
b. $54,000.
c. $46,000.
d. $30,000.

7. Dudeâ??s Skateboards Enterprises has fixed costs of $225,000. Dudeâ??s skateboards sell for $45 each and have a variable cost of $20 each. What is Dudeâ??s break-even point in units?
a. 8,500
b. 8,750
c. 9,000
d. 9,250

8. Wahoo, Inc. is currently on schedule to sell 200,000 units of its most popular product. The firmâ??s average selling price per unit is $16.00. Variable cost per unit is $11.00. Interest expense is running at $50,000 per year, while fixed costs total $800,000. What is the firmâ??s break-even point in sales?
a. $3,240,000
b. $2,560,000
c. $1,720,000
d. $980,000

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Finance

1. Review of financial statements) Prepare a balance sheet and income statement as of December 31, 2003, for the Sharpe Mfg. Co. from the following information.

Accounts receivable $120,000
Machinery and equipment 700,000
Accumulated depreciation 236,000
Notes payable 100,000
Net sales 800,000
Inventory 110,000
Accounts payable 90,000
Long-term debt 160,000
Cost of goods sold 500,000
Operating expenses 280,000
Common stock 320,000
Cash 96,000
Retained earningsâ?"prior year 100,000
Retained earningsâ?"current year ?

Sharpe Mfg. Co.
Income Statement
For the Year Ended December 31, 2003

Net sales 800,000
Less: Cost of goods sold 500,000
Gross Profit 300,000
Less: Operating expenses 280,000
Net Income 20,000

Sharpe Mfg. Co.
Balance Sheet
December 31, 2003

Cash ...

Solution Summary

This solution is comprised of a detailed explanation to prepare a balance sheet and income statement as of December 31, 2003, for the Sharpe Mfg. Co. from the following information.

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