case study 1 Please be informed that This is strictly an individual assignment. In the multiple-choice questions, please highlight your answer. Once you are done with inserting all your answers in this sheet, please make sure they are correctly saved, and then upload the word file to the folder on blackboard you initially downloaded it from (course materials/case study 1) Make sure that you upload your file before the due date (September 24th at 11:59pm). following is the balance sheet for Excel Inc. for the year ended Dec 31st, 2018. Consolidated Balance sheet Excel ing As of Dec 31", 2018 Assets Liabilities + Owners Equity Current Assets Current Liabilities Cash 40,000 Accounts Payable 12,000 Accounts Receivables 4,000 Notes Payable 6,000 Inventory 14,000 Accrue Wages 1000 Total Current Assets 58,000 Total Current Liabilities 19,000 Fixed Assets Long term debt 40,000 Property, Plant, and 56,000 Equipment Owners' equity Goodwill 24,000 Common Shares 40,000 Total Fixed Assets 80,000 Retained Earnings 39,000 Total Owners equity 79,000 Total Assets 138.000 Liabilities +0.E 138.000 In addition to that you know the following facts about firm's operations throughout the year: revenues for the year includes the following: Domestic revenues $160,000. International revenues $80,000. cost of sales and direct labor is 50% of annual revenues. Because of the strong competition that it faces. Excel Inc. has a generous marketing plan. They signed a contract with the marketing planet Inc. by which the marketing agency will be responsible for Excel Inc. marketing for five years period started this year. The contract costs Excel $100,000 that will be paid evenly over the next five years, the company thinks this plan will affect its sales evenly over the five years period. Excel Inc. also spends $30,000 in the form of general and administrative expenses per year. The depreciable assets historical value is $40,000 and is depreciated on a straight-line basis over 10 years. Excel pays 10% interest rate on its Long-term debt outstanding. Excel pays 40% of its taxable income as tax expense. 1 Out of the year's net income, Excel Inc. is planning to repay $30,000 to its shareholders in the form of cash dividends. The company currently has 60,000 shares outstanding Please set up the income statement for Excel Inc: Consolidated Income Statement Excel Inc. As of Dec 31, 2018 Revenues (-) Cost of goods sold Gross margin (-) Marketing expenses (-) General and administrative expenses (-) Depreciation EBIT (-) Interest expenses EBT (-) Tax expenses Net income Dividends Additions to Retained Earnings 1- Ms. Janet Mcinish works as an elementary school teacher and has a taxable income from her job of $35,000. She inherited 10% of Excel shares outstanding, and recently received her annual dividends. What is the amount of annual dividends received by Mrs. Melnish? a) $ 5000 b) $ 720 c) $ 3000 d) $3720 Mr. David Lawson, the CFO of Excel Inc. plans to increase the company's long term debt from $40,000 to $80,000 by getting a 5 year loan from bank of America. 2- What type of financial decisions did MR. David take? a) Capital budgeting decision. (investment decision) b) Capital structure decision. (financing decision) c) Working capital management decision d) Accounting decision 2