problem1. For each of the following, determine the missing balance. a. Net Income $82,900 Cost of Goods Sold $459,030 Advertising Expense $56,000 Gain on Sale of Equipment $5,000 Income Tax Expense $50,000 Sales Revenue ? b. Net Income $6,500 Retained Earnings, 12/31 $16,200 Dividends $2,900 Retained Earnings, 1/1 ? c. Cash $460,000 Accounts Receivable $540,200 Current Assets $1,670,000 Inventory ? d. Total Assets $54,000 Total Liabilities $32,000 Capital Stock $15,000 Retained Earnings ?

problem2. Rescue Records needs rescuing. The downloading of songs over the Internet is killing its business. The owners of Rescue want to know if they made a net income or a net loss during the current year that ended on December 31, Year One. Given the following account balances, prepare an income statement for Rescue similar to the example shown in Figure 3.1. Advertising Expense $4,600 Salary Expense $25,470 Cost of Goods Sold $109,000 Sales Revenue $197,000 Income Tax Expense $3,800 Loss on Sale of Land $12,090 Rent Expense $35,000

Problem3. Your lawn care business, A Cut Above, has grown beyond your wildest dreamsto the point where you would like to buy some new equipment and hire some people to help you. Unfortunately, you dont have that kind of money sitting around, so you are applying for a loan. The bank has requested financial statements, including, of course, a balance sheet. The following are the balances you have on December 31, Year One. Prepare a classified balance sheet to submit to the bank. Cash $2,400 Prepaid Insurance $1,600 Note Payable Due Two Years from Now (Loan from Mom) $5,000 Capital Stock (Money You Invested to Start Business) $2,000 Accounts Receivable $500 Supplies Inventory $300 Equipment $3,000 Accounts Payable $200 Retained Earnings, 12/31 $600