Group $4-$ Major Assignment $2$: Part I

Magic GMBA $4$ Corporation $??$

Income Statements

For the Years Ended December $31,2020$ and $2019$

$20202019$

$ $

Operating revenues$-$ Note $1?1,944,000$

Less: Cost of goods sold $968,000960,000$

Gross Profit $1,124,800984,000$

Operating expenses

Selling and administrative expenses $368,000400,000$

Depreciation expense $?80,000$

Other expense $160,000128,000$

Bad debt expense $8,0007,200$

Rent expense $160,000160,000$

Operating expenses $776,000775,200$

Net income from operations $?208,800$

Inventory loss $(80,000)-$

Interest expense $(71,472)(70,784)$

Income before tax $197,328138,016$

Income tax expense $(80,000)(48,000)$

Net income $117,32890,016$

Note $1$: Operating revenue includes $$84,600$ gain on disposal of plant assets and other similar items.

$$

Magic GMBA $4$ Corporation $??$

Balance Sheets

December $31,2020$ and $2019$

ASSETS $20202019$

$ $

Cash $227,760938,816$

Accounts receivable $720,000560,000$

Less: Allowance for bad debts $(9,600)(8,800)$

Inventory $?720,000$

$$Total current assets $1,818,1602,210,016$

Long term investment $191,200174,400$

Property, plant, and equipment $?800,000$

Less: Accumulated depreciation $(304,000)(320,000)$

Goodwill $240,000-$

$$Total assets $3,449,3602,864,416$

LIABILITIES AND SHAREHOLDERS$$ EQUITY

Liabilities

Accounts payable $256,000131,200$

Accrued payables $224,00096,000$

Unearned revenues $?128,000$

$$Total current liabilities $480,000355,200$

Other long term liability $-$ pension $117,42485,424$

Bonds payable $800,000800,000$

Less: Discount on bonds payable $(77,888)(85,360)$

Deferred income tax $50,48051,136$

$$Total Liabilities $1,370,0161,206,400$

Shareholders$$ equity

Preferred stock $800,000800,000$

Common stock $80,00080,000$

Additional paid$-$in capital $960,000880,000$

Retained earnings $527,344506,016$

Less: Treasury stock $(288,000)(608,000)$

$$Total shareholders$$ equity $?1,658,016$

$$Total liabilities and shareholders$$ equity $3,449,3602,864,416$ Complete the income statement for the year $2020.$

Complete the balance sheet for the year $2020.$

Prepare a cash flows statement for the operating activities for the year $2020.$

Compute ratios that can be calculated from the data presented $(2$ years, trend, percentages etc.$)$