Exercise: Construct a set of Financial Statements for The Russian Spies, including a Balance Sheet and an Income Statement. Each item will be used only once, and should follow the general rules of financial statements (which items come first, groupings, etc). The numbers balance, and will be used to answer questions later(40 points) Cash 295 Accounts Payable 2 0 Wages Payable 25 Insurance Expense 45 Cost of Goods Sold 2001 Sales 3890 Retained Earnings 803 Prepaid Insurance 30 Property Plant & Equip 1080 Depreciation Expense 108 Accumulated Depreciation 360 Interest Expense 24 Total Assets Gross Margin ? Net Income 850 2400 Net Income 850 As of Dec 31, 2016 For the Year Ended Dec. 31, 2016 Total Liabilities Notes Payable Rent Expense Unearned Revenue 767 680 405 42 200 Total Equity Payroll Expense 402 Shareholder Distributions 30 Tax & Licenses Expense 55 Total Liabilities & Equity ? Accounts Receivable 155 Common Stock 10 Goodwill (mojo) 1000 Inventory The Russian Spy Agency Income Statement What is the value for: 1. Total Equity? 2. Total Liabilities & Equity? 3. Gross Margin? 4. Return on Sales? 5. Inventory Turnover? Assume inventory was 100 at the beginning of the year. 6. Asset Turnover? Assume Total Assets were 2000 at the beginning of the year. 7. Assuming Inventory was 100 at the beginning of the year, how much inventory was purchased by the Russian Spy Agency this year? 8. How much cash & cash equivalents did the Russian shareholders pull out of the business in 2016? 9. What is the total of Operating Expenses for 2016? 10. How much cash did the Russians collect for sales attributable to next year, 2017? 11. Is this business healthy? Why or why not? Is there anything they can do to improve the model