Hello, Looking for help on the balance sheet and statement of cash flows.
1. Financial Statements: Develop an Income Statement for 20XX, Cash Flow Statement for 20XX, and Balance Sheet as of the end of 20XX based on the data provided below for year 20XX. All sales are collected when the sale is made and all expenses are paid when the expense is incurred. Explain the purpose of each financial statement. a. Income Statement Data for 20XX: Units produced and sold = 420 Sales ($80 per unit selling price) = $33600 Cost of goods sold ($30 per unit, all variable costs) = $12600 Labor = $0 (Mr. and Mr. Lee were the only ones working and did not pay themselves) Advertising fees =$2000 Bank fees = $150 Phone/internet = $1200 Shipping ($3 per unit) = $1260 Utilities = $900 Office supplies = $800 . Interest expense on note payable = $350 Depreciation expense (straight line) = $800 Income tax rate = 26% b. Other Financial Data for 20XX: Proceeds from sale of equipment = $3000. The equipment originally cost $1000 and had accumulated depreciation of $200. Purchase of equipment = $1600 (The machine is purchased on the last day of 20XX so no depreciation expense is recorded.) Repayment of note payable = $5000 Consider any data relevant from the income statement. C. Balance Sheet Data for Beginning of 20XX: Cash and cash equivalents = $10000 Accounts receivable = $0 (Cash is received at time of sale) Raw materials inventory = $10500 Equipment = $5000 (This includes the $1000 cost of the equipment sold in 20XX). Accumulated depreciation = $1,000 (This includes the accumulated depreciation of 200 for the equipment sold in 20XX. Accounts payable = $0 (Cash is paid at the time of purchase.) Note payable = $5000 (This is the note payable which is repaid in 20XX) Common stock = $15000 Retained earnings = $4500 BASELINE INCOME STATEMENT, YEAR ENDING DECEMBER 31, 20XX $ Sales Cost of Goods Sold Gross profit 33,600 12,600 21,000 $ Selling, General and Administrative Expenses Shipping advertising fees Bank fees Phone/internet Utilities Office supplies Depreciation expense (straight line) Total SGA Expenses 1,260 2,000 150 1,200 900 800 800 7,110 $ Operating Income (EBIT) $ 13,890 350 Interest expense on loan Pre-tax income 13,540 26.08% Taxes Payable @ 26% NET INCOME before gain on sale of Asset 3,520 10,020 $ Gain on sale of asset (+) Taxes on gain (-) @26% Net impact of Sale of Asset $ $ $ 2,200 572 1,628 Net Income $ 11,648 Memo Total Taxes $ 4,092 Statement of Cash Flows For The Year Ended December 31, 20XX Operating Activities Net Income 11,648 Add back: Depreciation and Amortization 800 Changes in Working Capital Decrease (Increase) in inventory Decrease (Increase) in Accounts Receivable Increase (Decrease) in Accounts payable Increase (Decrease) in Income tax payable Net Change in Working Capital (4,092) (4,092) Net Cash Provided (Used) by Operating Activities 8,355 Investing Activities Purchase of Equipment Sale of Fixed Assets (Equipment) 1,600 3,000 Net Cash Provided (Used Jin Investing Activities 4,600 Financing Activities Repayment of Debt (5,000) Net Cash Provided (Used) in Financing Activities (5,000) Net Increase (Decrease) in Cash Cash at Beginning of Period Ending Cash Balance 7,955 10,000 17,955 Balance Sheet PRIOR YEAR END December 31 20XW CURRENT YEAR END December 31, 20XX PRIOR YEAR END December 31 20XW CURRENT YEAR END December 31, 20XX ASSETS 10,000 17,955 LIABILITIES (Current) Accounts Payable Income Taxes Payable Total Current Liabilities CURRENT ASSETS Cash and Equivalents Accounts Receivable Inventories TOTAL CURRENT ASSETS 5000 4,092 5,000 4,092 10,500 20,500 10,500 28,455 Long Term Debt Total Noncurrent Liabilities EQUITY 4,000 FIXed ASSETS Property, plant, equipment Minus: Accum. Depreciation Total Fixed Assets 5,000 1,000 4,000 800 15,000 4,800 Common Stock Retained Earnings Total Equity 15,000 4,500 19,500 15,000 TOTAL ASSETS 24,500 $ 33,255 TOTAL LIABILITIES & EQUITY $ 24,500 $ 19,092 diset $ (14,163) 16,148
