The Balance Sheet is a financial statement that includes a list of assets owned by the company in order to produce its products or supply its services and a list of liabilities and equities (sources of capital) used by the company to acquire those assets. During the normal course of business, many of these accounts are constantly increasing or decreasing. The Balance Sheet represents a snapshot of asset and liability accounts at a specified time.

You have completed the "Balance Sheet" section of Financial Statement Analysis. Please complete the Progress Check and then continue with the "Income Statement" section. If you answer any questions incorrectly, please review the appropriate text.


Directions: Use the Balance Sheet for Fruit Packing, Inc. to answer the following questions. Calculate the answer to each question, then mark the correct answer. Check your solution with the Answer Key on the next page.

1.The value for the NET FIXED ASSET account is missing. What should the correct amount be for the Balance Sheet to be correct? _____ a) 121.1 _____ b) 177.1 _____ c) 137.3 _____ d) 81.3 _____ e) 56.0

2.Suppose that $1.2 million worth of apples spoiled before the company was able to package them. What asset account would be affected? _____ a) Cash _____ b) Accounts Receivable _____ c) Raw Goods Inventory _____ d) Prepaid Expenses _____ e) Gross Fixed Assets