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Balance Sheet for Illini Tap 2018 2019 2018 2019 113,000 97,000 41,000 83,000 39,000 16,000 15,000 10,000 75,000 15,000 10,000 15,000 14,000 9,000 As of December 31, 2019 ASSETS CURRENT ASSETS Cash Savings & short-term deposits Marketable securities (at market) Accounts receivable Supplies Inventories: Raw Inputs Intermediate Goods Completed Goods Cash invested in work in progress Prepaid expenses Other current assets - business Other current assets - personal TOTAL CURRENT ASSETS LIABILITIES AND OWNER EQUITY CURRENT LIABILITIES Accounts payable Credit line, short term notes Current portion of all term debt Accrued interest Accrued expenses Accrued taxes Accrued business expenses Other accrued items Current portion-deferred taxes Other current liabilities - business Other current liabilities - personal 21,000 3,000 24,000 4,000 27,000 25,000 2,492 1,359 29,500 31,000 261,500 253,000 TOTAL CURRENT LIABILITIES 106,492 99,359 175,000 220,000 165,000 220,000 70,000 72,000 NONCURRENT ASSETS Breeding livestock (at market) Machinery & equipment (at market) Investments in capital leased assets Investments in cooperatives Investments in other entities Retirement accounts Cash value of insurance policies Long-term financial assets, nonmarketable securities Business Real Estate Land Buildings Other noncurrent assets -business Other noncurrent assets-personal TOTAL NONCURRENT ASSETS NONCURRENT LIABILITIES Noncurrent portion of term business debt: Non-real estate debt: Maturity less than 10 years Maturity greather than or equal to 10 years Real estate debt: Maturity less than 10 years Maturity greather than or equal to 10 years Noncurrent portion-deferred taxes Other noncurrent liabilities - business Other noncurrent liabilities - personal 330,000 12,600 3,000 145,000 295.000 TOTAL NONCURRENT LIABILITIES 168,000 562,600 245,000 732,000 TOTAL LIABILITIES 274,492 661,959 OWNER EQUITY Contributed capital Retained earnings Valuation equity TOTAL OWNER EQUITY TOTAL LIABILITIES & OWNER EQUITY 100,000 112,009 20,000 232,009 506,500 100,000 188,641 34,400 323,041 985,000 TOTAL ASSETS 506,500 985,000 NOTES to accompany Financial Statements: Book values (cost less depreciation) Financial investments Other investments Machinery and equipment Real-estate land Real-estate buildings 70,000 50,000 185,000 70,000 50,000 215,000 140,000 285,000 INCOME STATEMENT for Tap For the period: to: January 1, 2018 December 31, 2018 Hem Subtotal Total Line 910,000 (1) REVENUES AND ADJUSTMENTS Sales Cash receipts Other business income Accrual adjustments: Inventorias Accounts Receivable -2.000 15.000 (4 Gross revenue 922,000 > $923,000 650.000 OPERATING AND INTEREST EXPENSES AND ADJUSTMENTS Operating Expenses: Cash operating expenses Accrual adjustments: Accounts payable Prepaid Expenses Supplies Work in progress Other accrued expenses and items 2000 (7) 1,500 1.000 0 1,000 90 (10) Depreciation 50.000 Total Operating Expensa 700,500 17,000 Interest Expenses: Amount of interest paid in cash Accrual adjustments: Accrued interest 4.000 Total Interest Expense 21.000 (16) Total Operating and Interest Expense 721.500 > $721,500 (17) Not income from operations $201,500 (1) $5,000 (19) $196,500 (220 Gainalosses on sales of capital assets Nat income before tawas and non-business adjustments NON-BUSINESS ITEMS Non-business wagas Non business interest and dividends Other non-business income Gainslosses on sales of nonbusiness assets (21) 5,000 (220 Total non business income 5,000 > $5,000 Net income before taves $201,500 (20) 48,000 (27) TAX EXPENSES AND ADJUSTMENTS Amount of tax paid in cash Accrual adjustments: Income and social security taxes Current portion of deferred taxes 3.000 - 1.133 20 Total Tax Expense 49.868 >> $49,868 (30) NET INCOME $151,633 (31) STATEMENT OF CASH FLOWS for Illini Tap Subtotal Total 910,000 5,000 915,000 >>$ 915,000 For the period: January 1, 2018 to: December 31, 2018 Item CASH FLOWS FROM OPERATING ACTIVITIES Inflows Cash received from business sales/receipts Cash received from net nonbusiness income Total cash inflows from operating activities Outflows Cash paid for operating expenses Cash paid for operating & S.t. loan interest Cash paid for long-term loan interest Cash paid for purchased inputs Cash paid for other items purchased for resale Cash paid for income and social security taxes Cash withdrawals for owner/family living Total cash outflows from operating activities Net cash flows provided by operating activities 650,000 2.500 14,500 48,000 75,000 790,000 >>$ $ 790,000 125,000 15,000 15,000 15,000 CASH FLOWS FROM INVESTING ACTIVITIES Inflows Cash received on sale of machinery/equipment/real estate Cash received from sale of internally transferred capital Cash received from withdrawals of savings Cash received from sale of personal assets/retirement accts. Total cash inflows from investing activities Outflows Cash paid to purchase machinery/equipment/real estate Cash paid to purchased productive capital items Cash paid for deposits to savings accounts Cash paid to purchase marketable securities Cash paid to purchase personal assets/retirement accts. Total cash outflows from investing activities Net cash flows provided by investing activities 525,000 525,000 >> $ 525,000 $ (510,000) 400,000 400,000 400,000 CASH FLOWS FROM FINANCING ACTIVITIES Inflows Proceeds from operating loans and short-term notes Proceeds from term debt financing Cash received from capital contributions Total cash inflows from financing activities Outflows Cash repayment of operating and short-term loans Cash repayment of term debt-scheduled Cash repayment of term debt-unscheduled Cash repayment of capital leases Cash payments of dividends and other capital distributions Total cash outflows from financing activities Net cash flows provided by financing activities 16.000 15,000 31.000 >>$ 31,000 369,000 Net increase (decrease) in cash flows Beginning of year cash balance End of year cash balance $ (16,000) $ 113,000 $ 97,000 STATEMENT OF OWNER EQUITY for Illini Tap For the period: January 1, 2018 to: December 31, 2018 Item Subtotal Total Beginning of period owner equity $ 232,009 b 151,633 75,000 c Changes in contributed capital and retained earnings: Net Income Withdrawals owner/family living Capital Contributions: Debt forgiveness Gifts Inheritances Capital Distributions: Dividends Gifts Inheritances + + + 0 0 f g 0 0 0 h i Total change in contributed capital and retained earnings $ 76,633 >$ 76,633 i $ K mut funds brewery 1 -8,000 2,000 15,000 5,000 10,000 n Change in market valuation (market value over cost/basis) of: Marketable securities Other business investments Machinery and equipment Land Buildings Other capital assets Personal assets Personal liabilities Total change in market valuation Change in noncurrent portion of deferred taxes P 9 r $ 24,000 9,600 + 14,400 >$ Total change in valuation equity Total Change in Owner Equity End of period owner equity 14,400 91,033 323,041 V Note: the 1. Complete the table below by calculating the missing performance measures for the Illini Tap. Calculate liquidity and solvency measures for 2018 and 2019. profitability, efficiency, and repayments measures can be calculated only for 2019 operations (32 pts.) 2018 2019 Current Ratio Working Capital Working Capital Ratio Debt-to-Asset Ratio Debt-to Equity Ratio Equity-to-Asset Ratio n/a Return on Assets Return on Equity Operating Profit Margin n/a n/a Asset Turnover Ratio n/a n/a Repayment Capacity Repayment Margin Coverage Ratio n/a $131,633 $102,633 2.49 n/a 2. Is the Illini Tap liquid? Is the bar solvent? Has the liquidity or solvency position of the bar changed dramatically during 2019? Do any of the liquidity or solvency measures indicate potential trouble for the bar? Provide a brief discussion for your answers (12 pts.) Type answer here 3. What does the repayment capacity represent? What does the repayment margin represent? Interpret the term debt and capital lease coverage ratio for the Illini Tap. (12 pts.) Type answer here