CAPTAIN JET INC. INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2014 Sales Revenue Less: Sales Return Net Sales Cost of Goods Sold Gross Profit Utilities Expenses Salary and Wages Expenses Rent Expenses Depreciation Expenses Interest Expenses Supplies Expenses Bad Debt Expense:s Total Operating Expenses Earnings before Income Taxes Income Tax Expenses Earnings after Income Taxes 123,500 123,100 85,316 (400) 37,784 12,152 45,500 2,500 14,250 6,300 400 1,300 82,402 2,914 250 2,664 CAPTAIN JET INC. INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2014 Retained Earnings, Beginr 152,250 Net Income/Loss 2,664 (800) Retained Earnings, End of 154,114 CAPTAIN JET INC. BALANCE SHEET 31-Dec-14 31-Dec-13 Current Assets Cash Accounts Receivable Inventories Prepaid Insurance Prepaid Rent 41,200 54,800 40,000 540 500 137,040 84,798 56,700 40,416 540 4,000 186,454 Total Current Assets Non-Current Assets Long-term Investments 51,000 45,500 51,000 45,500 Investments in equity securities Land held for future development Property, Plant, and Equipment Buildings Less: Accumulated Depreciation 391,000 (201,750) 376,000 (187,500) Intangible Assets 8,000 76,000 48,000 417,750 604,204 8,000 76,000 48,000 417,000 554,040 Capitalized Development Costs Goodwill Other ldentifiable Intangible Assets Total Non-Current Assets Total Assets Current Liabilities Accounts payable Salary and Wages Payable Interest Payable Unearned Revenue Income Tax payable Property taxes payable Utilities payable 53,500 1,500 1,800 12,000 8,690 6,600 1,250 85,340 33,500 0 1,500 12,000 8,440 6,600 0 62,040 Total Current Liabilities Non-Current Liabilities Notes payable 120,000 0 0 120,000 205,340 110,000 0 0 110,000 172,040 Provisions Related to Pensions Bonds Payable Total Non-Current Liabilities Total Liabilities Stockholders' Equity Common Stock ($10 par, 11,000 and 10,000 shares) Preferred Stock (5% dividend, $100 par values, 1050 and 1 Paid-in-capital Comm Paid-in-capital - Preferred Stock Retained Earnings Accumulated Other Comprehensive Income Less: Treasury Stock 110,000 105,000 27,500 10,000 154,114 5,000 (12,750) 398,864 604,204 100,000 100,000 27,500 10,000 152,250 5,000 (12,750) 382,000 554,040 in-capital - Common Stock Total Stockholders' Equity Total Liabilities and Stockholders' Equity Provide projected Income Statement, Retained Earnings statement and Projected Balance Sheet on the right using the following assumptions: 1 sales growth is 110%; sales return, as a percentage of sales revenue, does not change 2 Gross profit margin is the same as 2014 profit margin 3 Depreciation expense/Prior PPE (gross)-4% 4 Interest expense/Prior year long-term debt 6% 5 All other expenses (insurance, supplies, utilities, bad debt and rent) grow at the same rate as sales growth. 6 Income tax expense/ pre-tax income-12% 7 A/R turnover is the same as that calculated for year 2014 8 A/P turnover is the same as that calculated for year 2014 9 Inventory turnover is the same as that calculated for year 2014 10 There is no change in current assets other than Cash, A/R and inventory 11 Capital expenditure/Sales-7% 12 Assume no change in long-term assets except for PP&E. 13 Assume no change in all liabilities, excpet for A/P 14 Assume no change in shareholders' Equity except for Retained Earnings 15 No dividend is paid on common stock and 5% dividend is paid on preferred stock CAPTAIN JET INC. INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2014 Sales Revenue Less: Sales Return Net Sales Cost of Goods Sold Gross Profit Utilities Expenses Salary and Wages Expenses Rent Expenses Depreciation Expenses Interest Expenses Supplies Expenses Bad Debt Expense:s Total operating Expenses Earnings before Income Taxes Income Tax Expenses Earnings after Income Taxes step 1 step 2 step 4 step 3 step 5 step 5 step 5 step / step 6 step 5 step 5 step 8 CAPTAIN JET INC. INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2014 Retained Earnings, Beginning of the year Net Income/Loss Dividends Payment Retained Earnings, End of the year CAPTAIN JET INC. Balance Sheet FOR THE YEAR ENDED DECEMBER 31, 2014 Current Assets Cash Accounts Receivable Inventories Prepaid Insurance Prepaid Rent LAST STEP Step 1 step 2 step 3 step 3 Use calculated A/R turnover from "ratios" Use calculated inventory turnover from "ratios" Total Current Assets Non-Current Assets Long-term Investments step4 step 4 Investments in equity secu Land held for future develc Property, Plant, and Equipment Buildings Less: Accumulated Depreci step 5 step 6 Intangible Assets Capitalized Development C Goodwill Other Identifiable Intangibl step 7 step 7 step 7 Total Non-Current Assets Total Assets Current Liabilities Accounts payable Salary and Wages Payable Interest Payable Unearned Revenue Income Tax payable Property taxes payable Utilities payable Use calculated A/P turnover from "ratios" step 8 step 9 step 9 step 9 step 9 step 9 step 9 Total Current Liabilities Non-Current Liabilities Notes payable step 10 Provisions Related to Pensions Bonds Payable Total Non-Current Liabilities Total Liabilities Stockholders' Equity Common Stock Preferred Stock (5% dividend) Paid-in-capital - Common Stoc Paid-in-capital Preferred Sto Retained Earnings Accumulated Other Compreh Less: Treasury Stock step 12 step 12 step 12 step 12 step 11 step 12 step 12 Total Stockholders' Equity Total Liabilities and Stockholders' Equity CAPTAIN JET INC. INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2014 Sales Revenue Less: Sales Return Net Sales Cost of Goods Sold Gross Profit Utilities Expenses Salary and Wages Expenses Rent Expenses Depreciation Expenses Interest Expenses Supplies Expenses Bad Debt Expense:s Total Operating Expenses Earnings before Income Taxes Income Tax Expenses Earnings after Income Taxes 123,500 123,100 85,316 (400) 37,784 12,152 45,500 2,500 14,250 6,300 400 1,300 82,402 2,914 250 2,664 CAPTAIN JET INC. INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2014 Retained Earnings, Beginr 152,250 Net Income/Loss 2,664 (800) Retained Earnings, End of 154,114 CAPTAIN JET INC. BALANCE SHEET 31-Dec-14 31-Dec-13 Current Assets Cash Accounts Receivable Inventories Prepaid Insurance Prepaid Rent 41,200 54,800 40,000 540 500 137,040 84,798 56,700 40,416 540 4,000 186,454 Total Current Assets Non-Current Assets Long-term Investments 51,000 45,500 51,000 45,500 Investments in equity securities Land held for future development Property, Plant, and Equipment Buildings Less: Accumulated Depreciation 391,000 (201,750) 376,000 (187,500) Intangible Assets 8,000 76,000 48,000 417,750 604,204 8,000 76,000 48,000 417,000 554,040 Capitalized Development Costs Goodwill Other ldentifiable Intangible Assets Total Non-Current Assets Total Assets Current Liabilities Accounts payable Salary and Wages Payable Interest Payable Unearned Revenue Income Tax payable Property taxes payable Utilities payable 53,500 1,500 1,800 12,000 8,690 6,600 1,250 85,340 33,500 0 1,500 12,000 8,440 6,600 0 62,040 Total Current Liabilities Non-Current Liabilities Notes payable 120,000 0 0 120,000 205,340 110,000 0 0 110,000 172,040 Provisions Related to Pensions Bonds Payable Total Non-Current Liabilities Total Liabilities Stockholders' Equity Common Stock ($10 par, 11,000 and 10,000 shares) Preferred Stock (5% dividend, $100 par values, 1050 and 1 Paid-in-capital Comm Paid-in-capital - Preferred Stock Retained Earnings Accumulated Other Comprehensive Income Less: Treasury Stock 110,000 105,000 27,500 10,000 154,114 5,000 (12,750) 398,864 604,204 100,000 100,000 27,500 10,000 152,250 5,000 (12,750) 382,000 554,040 in-capital - Common Stock Total Stockholders' Equity Total Liabilities and Stockholders' Equity Provide projected Income Statement, Retained Earnings statement and Projected Balance Sheet on the right using the following assumptions: 1 sales growth is 110%; sales return, as a percentage of sales revenue, does not change 2 Gross profit margin is the same as 2014 profit margin 3 Depreciation expense/Prior PPE (gross)-4% 4 Interest expense/Prior year long-term debt 6% 5 All other expenses (insurance, supplies, utilities, bad debt and rent) grow at the same rate as sales growth. 6 Income tax expense/ pre-tax income-12% 7 A/R turnover is the same as that calculated for year 2014 8 A/P turnover is the same as that calculated for year 2014 9 Inventory turnover is the same as that calculated for year 2014 10 There is no change in current assets other than Cash, A/R and inventory 11 Capital expenditure/Sales-7% 12 Assume no change in long-term assets except for PP&E. 13 Assume no change in all liabilities, excpet for A/P 14 Assume no change in shareholders' Equity except for Retained Earnings 15 No dividend is paid on common stock and 5% dividend is paid on preferred stock CAPTAIN JET INC. INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2014 Sales Revenue Less: Sales Return Net Sales Cost of Goods Sold Gross Profit Utilities Expenses Salary and Wages Expenses Rent Expenses Depreciation Expenses Interest Expenses Supplies Expenses Bad Debt Expense:s Total operating Expenses Earnings before Income Taxes Income Tax Expenses Earnings after Income Taxes step 1 step 2 step 4 step 3 step 5 step 5 step 5 step / step 6 step 5 step 5 step 8 CAPTAIN JET INC. INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2014 Retained Earnings, Beginning of the year Net Income/Loss Dividends Payment Retained Earnings, End of the year CAPTAIN JET INC. Balance Sheet FOR THE YEAR ENDED DECEMBER 31, 2014 Current Assets Cash Accounts Receivable Inventories Prepaid Insurance Prepaid Rent LAST STEP Step 1 step 2 step 3 step 3 Use calculated A/R turnover from "ratios" Use calculated inventory turnover from "ratios" Total Current Assets Non-Current Assets Long-term Investments step4 step 4 Investments in equity secu Land held for future develc Property, Plant, and Equipment Buildings Less: Accumulated Depreci step 5 step 6 Intangible Assets Capitalized Development C Goodwill Other Identifiable Intangibl step 7 step 7 step 7 Total Non-Current Assets Total Assets Current Liabilities Accounts payable Salary and Wages Payable Interest Payable Unearned Revenue Income Tax payable Property taxes payable Utilities payable Use calculated A/P turnover from "ratios" step 8 step 9 step 9 step 9 step 9 step 9 step 9 Total Current Liabilities Non-Current Liabilities Notes payable step 10 Provisions Related to Pensions Bonds Payable Total Non-Current Liabilities Total Liabilities Stockholders' Equity Common Stock Preferred Stock (5% dividend) Paid-in-capital - Common Stoc Paid-in-capital Preferred Sto Retained Earnings Accumulated Other Compreh Less: Treasury Stock step 12 step 12 step 12 step 12 step 11 step 12 step 12 Total Stockholders' Equity Total Liabilities and Stockholders' Equity