The prosecution also tried to undermine earlier testimony from one of their own witnesses — Jackson's ex-wife Deborah Rowe — by calling an investigator who said Rowe told him last year Jackson was a "sociopath."
The testimony on Tuesday came as the prosecution neared the end of its case.
Jackson, 46, is accused of molesting a 13-year-old boy at his Neverland ranch in February or March 2003, giving him alcohol and conspiring to hold the accuser's family captive to get them to rebut a damaging documentary about the pop star.
The detailed analysis of Jackson's multimillion-dollar empire was brought into the trial over vehement objections from defense attorneys who said it was irrelevant to the case and was based on hearsay statements contained in memos from various financial advisers.
CBS News Correspondent Steve Futterman reports that Jackson may be the king of pop, but he seems to not be able to keep a reign on his own finances.
There have been rumors about Jackson's dire financial condition for years, but this was the first time so many details were laid out in court, Futterman reports. A forensic accountant testified that as of 2002 and 2003 Jackson had massive debts.
Judge Rodney S. Melville instructed jurors they were not to consider the accounting figures "for the truth of the matter" but merely to show how the expert reached his conclusions.
Under questioning by Deputy District Attorney Gordon Auchincloss, forensic accountant John Duross O'Bryan traced Jackson's assets and liabilities from 1999 to 2004.
The witness said he obtained only one balance sheet, from June 30, 2002, and it showed Jackson with a net worth of negative $285 million. He said this included assets of $130 million and liabilities of $415 million.
He said the balance sheet was prepared on a tax basis and assets listed might actually have higher values.
"There was an ongoing cash crisis, not enough cash to pay bills," Duross O'Bryan testified.
He said he formed his opinions by reading through boxes of memos exchanged by Jackson's financial managers over the years, and he told of a warning to Jackson that if his overspending continued he might be forced to sell off his two greatest assets, the catalogue of his own songs and the Sony-ATV catalogue which contains rights to the works of numerous other artists including the Beatles.
The witness said even selling the catalogues would be problematic because that would incur a huge tax liability.
Defense attorney Thomas Mesereau Jr. said the catalogue was worth $1 billion in 2003, and there have been estimates it's now worth between $4 billion and $5 billion.
"Wouldn't it be relevant if you knew Mr. Jackson could accept one opportunity and solve (his liquidity problem) in a day," Mesereau asked.
"If it could be solved, why wasn't it?" the accountant replied.
Duross O'Bryan testified as of February 2003, the month a damaging documentary about Jackson aired on television, Jackson had $10.5 million in unpaid vendor invoices and only $38,000 in cash in bank accounts.
He also said Jackson owes Bank of America at least $235 million on a loan and a line of credit.
The testimony was offered to show Jackson was in deep financial trouble when the documentary aired and brought down a storm of criticism on the star for a statement in which he said he allowed children to sleep in his bed, although he insisted it was non-sexual.
Prosecutors are trying to show Jackson had banked on the documentary as a way to re-energize his career, and that it exploded in his face.
They say he then organized efforts at damage control; they maintain he tried to do this by holding captive the family of the boy he allegedly molested and forcing them to participate in the so-called rebuttal video.
The accountant testified he was aware Jackson negotiated with the Fox network to get $7 million for the rebuttal video.
"Let's say he has the opportunity to make a documentary that will generate $7 million," Mesereau said. "That $7 million is not going to make much of a difference" in Jackson's liabilities.
"No, it's not," the witness agreed.
"And it wouldn't be worth committing a crime, would it?" asked Mesereau.
The question was ruled argumentative and there was no answer.
Before the financial testimony, District Attorney Tom Sneddon called sheriff's Sgt. Steve Robel to the stand to undermine Rowe.
Jackson's ex-wife, the mother of two of his children, had unexpectedly praised Jackson as a good father and a generous and caring friend and denied prosecution contentions that her statements in another rebuttal video were scripted by the Jackson camp.
Asked what Rowe said to him in their year-ago interview, Robel said, "She referred to Michael as a sociopath and his children as being possessions."
Music producer Rudy Provencio is expected to be the last prosecution witness called to the stand. The big question is, Futterman reports, is: Will he significantly help the prosecution
Provencio worked closely with Jackson in 2003 when the alleged molestation took place, and he is expected to testify that Jackson was aware of efforts to use strong-arm tactics on the accusers family.