The Accountant for Scott Industries Prepared the Following List of Accounting

question 147

Essay

The accountant for Scott Industries prepared the following list of accounting equation element balances from the company's records for the year ended December 31:
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$$\begin{array} { l r l r } \text { Fees earned } & \$ 165,000 & \text { Cash } & \$ 30,000 \\\text { Accounts receivable } & 14,000 & \text { Selling expenses } & 44,000 \\\text { Equipment } & 64,000 & \text { Scott, capital } & 27,000 \\\text { Accounts payable } & 12,000 & \text { Interest income } & 3,000 \\\text { Salaries and wages expense } & 40,000 & \text { Prepaid rent } & 2,000 \\\text { Income taxes payable } & 5,000 & \text { Income taxes expense } & 18,000 \\\text { Notes payable } & 20,000 & \text { Rent expense } & 20,000\end{array}$$
-Based on the information for Scott Industries, is it profitable? Explain your answer.

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Definitions:

Issuers

Entities that create and distribute financial instruments like stocks, bonds, or notes to finance operations or expand capital.

Profits Within the State

Income generated within a specific state's geographical boundaries, subject to state taxation and regulation.

Investment Company Act

A United States federal law that was enacted in 1940 to regulate the organization of investment companies and the activities they engage in, primarily to protect investors.

Exploitation

The act of unfairly using someone or something for one’s own advantage or profit, often in an unethical or unjust manner.