Balance Sheet	Year 2	Year 1
Assets
Current Assets
Cash	$22,000	$ 3,000
Accounts receivable	22,000	23,000
Inventory	35,000	34,000
Long-term Assets
Plant Assets	153,200	97,200
Accum. Dep. Plant assets	(27,200)	(25,200)
Total Assets	$205,000	$132,000
Liabilities
Current Liabilities
Accounts Payable	35,000	26,000
Accrued Liabilities	7,000	9,000
Income Tax Payable	10,000	10,000
Long-term liabilities
Bonds Payable	84,000	53,000
Total Liabilities	$136,000	$98,000
Stockholders Equity
Common Stock no par	52,000	20,000
Retained Earnings	27,000	19,000
Treasury Stock	(10,000)	(5,000)
Total Stockholders Equity	69,000	34,000
Total Liab. And Stockholders Equity	$205,000	$132,000

Income Statement Year 2
Sales Revenue		$ 662,000
Costs of Goods Sold		560,000
Gross Profit		102,000
Operating Expenses
Salaries and Wages Expense	$46,000
Depreciation Expense-Plant Assets	10,000
Rent Expense	2,000
Total Operating Expenses		58,000
Operating Income		44,000
Other Revenue and Expenses
Loss on Disposal of Plant Assets	(2,000)
Total Other revenues and Expenses		(2,000)
Net Income Before Income Taxes		42,000
Income Tax Expense		16,000
Net Income		26,000

Part Two Contribution Margin

Harry and Hannah set up a company called Heavenly Tours. The provide tours around the Washington, D.C. area sights and monuments for tourists. Tickets cost $140 Assume that 2,200 customers were served in the month of August. The tax rate is 21%.

1. Compute the contribution margin.

2. Compute the contribution margin ratio.

3. Compute the break-even in sales units.

4. Compute the break-even in sales dollars.

5. Compute the margin of safety.

6. Prepare a contribution income statement for the month of August.

6. Compute the unit sales required for a monthly after-tax profit of $20,000.