stdudy 2

Selected current year-end financial statements of Cabot Corporation follow. (All sales were on credit selected balance sheet amoun at December 31 of the prior year were inventory. $53,900 total assets, $249,400, common stock, $82,000, and retained earnings, $40,288) CABOT CORPORATION Income Statement For current Year Ended December 31 Sales $ 440,600 Cost of goods sold 296,850 Gross profit 151,750 Operating expenses 90.900 Interest expense 6.100 Income before taxes 48,750 Income tax expense 19,633 Net Income 29,112 Assets Cash Short-ter investments Accounts receivable, nel Merchandise inventory CAUT CORPORATION Balance Sheet December 31 Liabilities and Equity 14,00 Accounts payable 3,400 Accrued wages payable 28,600 Incone taxes payable 42,150 Long-term note payable, secured by mortgage on plant assets 3,05e Common Stock 151,100 Retained earnings $ 247,500 Total liabilities and equity 17,500 5.000 4.200 69,400 Prepaid expenses Plant assets, net Total assets 82,000 69.400 $ 242.500