I'll start with the first part of my problem. This is a long assignment since it is a weekend one.

Part 1: Incomplete Comparative Balance Sheet. The percentage of Increases/decreases are to the side. And Accumulated Depreciation is listed twice. I'm assuming that is right and was meant to be part of the problem b/c that is how the homework has it.
2005 2004

Cash ? 25,000
Account Receivable ? 20,000
Inventory 15,000 ? (40%)
Prepaid Expenses 7,000 5,000 40%
LongTermInvestments 0 10,000(100%)
Land 60,000 60,000 0% Buildings 100,000 100,000 0%
Accum.Depreciation(44,000) (40,000) 10%
Equipment 68,000 40,000 70%
Accum.Depreciation(12,000) (30,000)(60%
Intangible Assets 44,000 0 100%
Total Assets ? ?

Accounts Payable 12,000 ? 20%
AccuredExensesPayable 8,000 10,000(20%)
Bonds Payable 0 ? (100%)
CommonStock, $1 Par Value ? 35,000
AdditionalPaid-in Capital ? 44,000

Retained earnings ? 50,000
Total Debt and Equity ? ?

Part two: Incomplete Income Statement

Net Sales Revenue 400,000
Cost of Goods Sold ?
Gross Profit ?
Operating Expenses:
Selling Expenses 44,500
Admin Expenses 58,000
Depreciation Expenses 16,000
Amortization Expense 6,000
124,500
Operating Income ?
Misc Items
Gains and Revenues:
Gain on Sale of Equipement 5,000
Interest Income 1,000
6,000
Losses and Expenses:
Loss on Sale of Investments (3,000)
Interest Expense (7,000)
(10,000)
(4,000)
Income Before Income Tax Expense ?
Income Tax Expense ?
Net Income ?

The following are Notes for the Financial Statement. I'm not sure if they're for figuring out how to filling in the balance and income statements or are strictly for doing the statement of cash flow.

1. Equipement was sold during the year. Its costs was $40,000 and its book value at the time of sale was $10,000.
2. On May 1, 2005, the company issued 6,000 shares of common stock at $2.50 a share.
3. On July 1, 2005, the company converted all outstanding bonds into common stock at face value.
4. All merchandise sales are on credit, accounts payable relates to vendor transactions, accured expenses payable are wages owed to the workers.
5. 2005 Selling expenses include $16,000 of salaries, and $18,000 of wages are included in admin expenses.

This part I know is meant to help us figure out the Balance sheet and Income statement. The problem I am having is reversing them.

2005 Current Ratio= 3:1
2005 Acid-Test Ration = 1.9:1
2005 Accounts Recievable Turnover = 16 times
2005 Net Income = 16.25%
2005 Gross Profit Ratio= 62.5%
2004 Debt to Assets = 40%
2004 Current Ration = 3.75:1

I'm a bit over whelmed with this. Any help would be appreciated.

To solve this problem, we need to fill in the missing values in the Comparative Balance Sheet and Incomplete Income Statement. We also need to analyze the given notes and use the provided financial ratios to complete the statements.

Let's start with the Comparative Balance Sheet:

1. Cash:
- In 2004: $25,000
- In 2005: ? (Unknown)

2. Accounts Receivable:
- In 2004: $20,000
- In 2005: ? (Unknown)

3. Inventory:
- In 2004: $15,000
- In 2005: ? (Decrease of 40% in comparison to 2004)

4. Prepaid Expenses:
- In 2004: $5,000
- In 2005: $7,000 (Increase of 40% in comparison to 2004)

5. Long Term Investments:
- In 2004: $10,000
- In 2005: ? (Decreased by 100% from 2004)

6. Land:
- In 2004: $60,000
- In 2005: $60,000 (No change from 2004)

7. Buildings:
- In 2004: $100,000
- In 2005: $100,000 (No change from 2004)

8. Accumulated Depreciation:
- In 2004: ($40,000)
- In 2005: ($44,000) (Increased by 10% from 2004)

9. Equipment:
- In 2004: $40,000
- In 2005: $68,000 (Increased by 70% from 2004)

10. Accumulated Depreciation - Equipment:
- In 2004: ($30,000)
- In 2005: ($12,000) (Decreased by 60% from 2004)

11. Intangible Assets:
- In 2004: $0
- In 2005: $44,000 (Increased by 100% from 2004)

Now, let's move on to the Incomplete Income Statement:

1. Cost of Goods Sold:
- Net Sales Revenue: $400,000
- Gross Profit: ? (Unknown)
- Cost of Goods Sold = Net Sales - Gross Profit

2. Operating Income:
- Operating Expenses:
- Selling Expenses: $44,500
- Admin Expenses: $58,000
- Depreciation Expenses: $16,000
- Amortization Expense: $6,000
- Total Operating Expenses = Selling + Admin + Depreciation + Amortization Expenses
- Operating Income = Gross Profit - Total Operating Expenses

3. Income Before Income Tax Expense:
- Misc Items:
- Gain on Sale of Equipment: $5,000
- Interest Income: $1,000
- Total Misc Items = Gain on Sale of Equipment + Interest Income
- Losses and Expenses:
- Loss on Sale of Investments: ($3,000)
- Interest Expense: ($7,000)
- Total Losses and Expenses = Loss on Sale of Investments + Interest Expense
- Income Before Income Tax Expense = Operating Income + Total Misc Items - Total Losses and Expenses

4. Income Tax Expense:
- Income Tax Expense = Income Before Income Tax Expense * (100% - 16.25%) (Given 2005 Net Income ratio is 16.25%)

5. Net Income:
- Net Income = Income Before Income Tax Expense - Income Tax Expense

Now, let's use the provided financial ratios and fill in the missing values:

1. 2005 Current Ratio = 3:1
- Current Ratio = Current Assets / Current Liabilities
- Current Assets (2005) / Current Liabilities (2005) = 3/1
- Use the known values from the balance sheets (Cash, Accounts Receivable, Inventory, Prepaid Expenses, Accounts Payable, Accrued Expenses Payable, Bonds Payable) to calculate the missing value for Current Assets (2005) or Current Liabilities (2005).

2. 2005 Acid-Test Ratio = 1.9:1
- Acid-Test Ratio = (Cash + Accounts Receivable + Short-term Investments) / Current Liabilities
- Use the known values from the balance sheets (Cash, Accounts Receivable, Inventory) to calculate the missing value for Short-term Investments (2005) or Current Liabilities (2005).

3. 2005 Accounts Receivable Turnover = 16 times
- Accounts Receivable Turnover = Net Credit Sales / Average Accounts Receivable
- Use the known value for Net Sales Revenue (2005) and the given turnover ratio to calculate Average Accounts Receivable (2005).

4. 2005 Net Income = 16.25%
- Net Income = (Net Income / Net Sales) * 100%
- Use the known value for Net Sales Revenue (2005) and the given net income ratio to calculate the missing value for Net Income (2005).

5. 2005 Gross Profit Ratio = 62.5%
- Gross Profit Ratio = (Gross Profit / Net Sales) * 100%
- Use the known value for Gross Profit (2005) and the given gross profit ratio to calculate the missing value for Net Sales Revenue (2005).

6. 2004 Debt to Assets = 40%
- Debt to Assets = (Total Debt / Total Assets) * 100%
- Use the known value for Total Debt and the given debt ratio to calculate the missing value for Total Assets (2004).

7. 2004 Current Ratio = 3.75:1
- Current Ratio = Current Assets / Current Liabilities
- Current Assets (2004) / Current Liabilities (2004) = 3.75/1
- Use the known values from the balance sheets (Cash, Accounts Receivable, Inventory, Prepaid Expenses, Accounts Payable, Accrued Expenses Payable, Bonds Payable) to calculate the missing value for Current Assets (2004) or Current Liabilities (2004).

By following these steps, you should be able to fill in the missing values in both the Comparative Balance Sheet and Incomplete Income Statement.