create income stament for year
Gordie's Hockey Supply Company Income Statement For the Year Findino Decemher 31. 2017 Table1 1 Gordie's Hockey Supply Company Estimate Percentage Distribution of Purchases and Sales for 2018 Gordie's Hockev Supply Company - Monthly Proforma and Cash Budget - 2018 sales are forecasted to be $51,000. - See Table 1 for the estimated percentage distribution of purchases and sales. - Twenty percent ( 20% ) of all sales are cash sales (i.e., collected immediately) and eighty percent (80%) of all sales are credit sales. There is no bad debt (i.e., all credit sales are collected). - The average collection period (ACP) was 45 days for all of 2017 and will be 45 days for all of 2018. November 2017 sales were $6,300 and December 2017 sales were $7,350. Assume sales are evenly distributed throughout each month. - Total purchases for 2018 are forecasted to be $42,500. COGS for 2018 are forecasted to be 80 percent of 2018 forecasted sales. - The accounts payable days period was 15 days for all of 2017 and will be 15 days for all of 2018 . December 2017 purchases were $3,400. Assume purchases are evenly distributed throughout each month. - Operating expenses (excluding depreciation) will be 13 percent of 2018 forecasted sales and are expected to be evenly distributed throughout the year. Depreciation expense on existing fixed assets will be $12 per month. - The firm's average tax rate is 35 percent. - Tax payments of $288 will be made in March, June, September, and December. Also, the $90 deferred tax balance on the 2017 Balance sheet will be paid in April. A long-term debt repayment of $85 will be made in October. - The minimum cash balance is $75. - The company plans to spend $900 on new long-term assets in August 2018. These new assets will be depreciated on a straight-line basis to a zero salvage value over 8 years. Depreciation on these new assets will be divided evenly per month and the first monthly depreciation on these new assets will occur in September. Eighty percent (80%) of the cost of the new fixed assets will be financed by an increase in the long-term mortgage loan (taken out in August). - The company plans to sell $35 in stock (via an employee stock plan) every month. - The only change in the deferred tax account will be due to accrued taxes. - The company plans to pay a \$175 dividend payment to shareholders in May 2018 and another $175 dividend payment in November 2018. - The interest rate on the bank loan (i.e., on short term debt) is 7% annually and the interest rate on long-term debt (i.e., the mortgage loan) is 9% annually. This interest rate is paid on the prior month's total loans balance (short-term plus long-term). Thus, given that the Bank loan balance on December 31, 2017 is $2,915 and the Mortgage loan balance on December 31, 2017 is $7,450, the interest paid in the month of January will be (.07/12)(2915)+(.09/12)(7450)=72.88=73
