(1) What effect did the expansion have on sales and net income? What effect did the expansion have on the asset side of the balance sheet? What effect did it have on liabilities and equity?
(2) What do you conclude from the statement of cash flow?
Donna Jamison, a graduate of The University of Tennessee with four years of banking experience, was recently brought in as assistant to the chairman of the board of Computron Industries, a manufacturer of electronic calculators. The company doubled its plant capacity, opened new sales offices outside its home territory, and launched an expensive advertising campaign. Comnputron€™s results were not satisfactory, to put it mildly. Its board of directors, which consisted of its president and vice-president plus its major stockholders (who were all local businesspeople), was most upset when directors learned how the expansion was going.

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2009 Balance Sheets Assets Accounts receivable 1.287 360 Total current assets $1,124,000 $1,946,802 Less: Accumulated depreciation Liabilities and Equity Total current liabilities $1,328,960 Common stock 100,000 shares Retained earmings Total liabilities and equity