Exercise 04 Based on the following information: During 2011.Zan Inc.. recorded the following transactions: Early in the year. purchased a new machine for $9,000 in cash and signed a 3-year note for the balance of $12.000. b. Had cash sales of S115,000 and sales on credit of $316,000 Purchased inventory and raw material from supplier for $207,000 d. Made payments of $225,000 to its inventory and raw materials suppliers Paid rent expenses totaling S$43,000 Paid insurance expense totaling $23,000 Paid utility bill totaling $7.500. S1,500 of this amount reversed the existing payable from 2010 a e f g. 2 Counting Paid wages and salaries totaling $79,000. S3,000 of this amount reversed the payable from 2010 i. h. Paid other miscellaneous operating expenses totaling $4,000 j. Collected $270,000 from its customers who made purchases on credit k. The interest rate on the Loan Payable is 10% per year. Interest was paid on 31 Dec. 2011 ZAN Inc. Balance Sheet Year Ended 31 December 2010 Liabilities and Share holder's Equity Assets Current Liabilities Account payable Salary payable Utilities payable Total current Assets Current Asscts $65,000 $3,000 $27,300 Cash Account receivable $35,000 $1,500 $57,000 Invenctry S69,500 Total Current Assets S119,300 $25.000 Property, Plant and Equipment Equimpment Less: Accumulated depreciation Net equipment Long-term liabilities $25,000 Shareholder's Equity (S2,500) $45,000 $16,300 Common Stock $22,500 Retained earning Total shareholder's Equity Furniture $16,000 (S2.000) $14,000 $61300 Less: Accumulated depreciation Net furniture Total Pro., Pant, Equi $36,500 $155,800 $155,800 Total liabilities & Equity Total Assets Other information: 1- The equipment has been estimated to have a useful life of 20 years, with no salvage value. Two years have been depreciated through 2010. 2- The existing furniture has been estimated to have a useful life of 8 years (no salvage value), of which one year has been depreciated through 2010. 3 The new machine has been estimated to have a useful life of 7 years, and will probably have no salvage value. 4 The tax rate is 35 %, and assume that taxes are paid on 31 December 2011 5 Dividend payout, if possible, will be 10% of net income on 31 December 2011 6 Cost of goods sold for the year's sales were $250,000 7- The company has 20,000 shares outstanding. Required 1-Construct Balance Sheet for Zan Inc., for year ended 31 December 2011 2- Construct Income Statement for operation during the year 2011 3- Construct Statement of Cash Flow for the year 2011