Gamma Manufacturing Co.

Scenario: Prepare Financial Statements

Balance Sheet Data:

• Assets:
  • Cash: $100,000
  • Accounts Receivable: $60,000
  • Inventory: $80,000

• Liabilities:
  • Accounts Payable: $50,000
  • Long-term Debt: $100,000

• Equity:
  • Common Stock: $80,000
  • Retained Earnings: $110,000

Income Statement Data:

• Revenue: $300,000
• Cost of Goods Sold: $150,000
• Operating Expenses: $50,000
• Income Tax Expense: $20,000

Requirements:

1. Prepare the balance sheet as of December 31, 2023.
2. Prepare the income statement for the year ended December 31, 2023.
3. Calculate the net income for Gamma Manufacturing Co.
4. Discuss the company's financial performance based on the financial statements.