Gamma Manufacturing Co.

Scenario: Analyze Financial Statements

Balance Sheet Data:

• Assets:
  • Cash: $100,000
  • Inventory: $80,000
  • Equipment: $200,000

• Liabilities:
  • Accounts Payable: $50,000
  • Notes Payable: $70,000

• Equity:
  • Retained Earnings: $180,000

Income Statement Data:

• Revenue: $300,000
• Expenses:
  • Cost of Goods Sold: $150,000
  • Operating Expenses: $50,000

Requirements:

1. Prepare the balance sheet as of December 31, 2023.
2. Prepare the income statement for the year ended December 31, 2023.
3. Analyze the company’s profitability and financial position based on these statements.