(Prepare an income statement and balance sheet from a list of accounts, LO 4, 5)

You have been provided with the following alphabetical list of accounts for Thaxted Ltd. for 2005. Use the information to prepare an income statement for the year ended December 31, 2005 and balance sheet as of December 31, 2005. You should be able to figure out how to treat accounts that have names that are unfamiliar to you by applying your understanding of the financial statements learned in this chapter.

Amounts are in thousands of dollars.

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Accounts payable Accounts receivable $ 110 Interest expense 105 200 Interest revenue 22 Accrued liabilities 46 Inventory 300 Accumulated amortization 750 Loans to shareholders 25 Advertising expenses 75 Long-term debt (non-current portion) 1,250 Amortization expense 210 Marketable securities 250 Capital assets 2,000 Other current assets 10 Capital stock 1,500 Other expenses 50 Cash 25 Other non-current assets 75 Cost of closing west coast division 75 Research costs 950 Cost of sales 950 Retained earnings at the beginning of the year 7,520 Current portion of long-term debt 50 Revenue from sale of products 1,750 Deposits and prepaid assets 52 Revenue from sale of services 1,250 Deposits from customers Dividends 25 25 Selling, general, and administrative expenses Trademarks and intellectual property 275 1,200 Income taxes payable 20 Wages expense 420 Income taxes recoverable from government 31 Wages payable 15