CHAPTER 2: THE BASIC FINANCIAL STATEMENTS Homework for Chapter 2: Problem #1 in the text (Chapter 2) Using the data presented below for Blue Sky Inc.: 2017 2016 Sales $7,550,000 $6,150,000 Cost of Goods 5,750,000 4,550,000 Depreciation 120,000 100,000 Selling and G&A Expenses 820,000 730,000 Fixed Expenses 200,000 200,000 Lease Expense 150,000 150,000 Interest Expense 350,000 300,000 Tax Rate 40.00% 40.00% Shares Outstanding 100,000 80,000 Cash 108,000 50,000 Marketable Securities 150,000 100,000 Accounts Receivable 450,000 350,000 Inventory 1,250,000 850,000 Prepaid Expenses 120,000 40,000 Plant & Equipment 5,350,000 4,800,000 Accumulated Depreciation 410,000 290,000 Long Term Investments 450,000 360,000 Accounts Payable 420,000 380,000 Notes Payable 150,000 100,000 Accrued Expenses 150,000 100,000 Other Current Liabilities 200,000 180,000 Long-term Debt 2,900,000 2,500,000 Common Stock 2,500,000 2,000,000 Additional Paid-in-Capital 600,000 500,000 Retained Earnings 548,000 500,000 a) Create Blue Sky's income statement and balance sheet using formulas wherever possible. Each statement should be on a separate worksheet. Improve the readability of the data by using the format explained on page 49, so that Excel will display the numbers as if they had been divided by 1,000. Make the appropriate note on the heading of each financial statement. b) On another worksheet, create a statement of cash flows for 2017. All formulas should be linked directly to the source on previous worksheets. c) Using Excel's outlining feature, create an outline on the balance sheet that, when collapsed, shows only the subtotals for each section.