HOGPLCisacompanywhoseaveragedailyproductionfortheyearwas10,000bpd,whichsoldat$60 perbarrel.Theyreceivedapaymentof$100million,depositedintotheirbankaccount,andthebalance isoutstanding.Theyclosedtheirbookswithacashbalanceof$50,000,purchasedfuelworth$1million, stationery for$20,000,andheldaChristmasparty for$50,000.Theyhavereceivedtheinvoices for theseexpenditures.

Theyalsohave:

1. Anaccruedrentof$2million.
2. Anoutstandingbankloanof$15millionrunningat10%perannum.
3. Outstandingleasepaymentsfortwoplatformsworth$2millioneach(10%paideachyear).
4. Afixedmortgageat5%perannumof$10million(long-term)
5. Along-termdebtforthepurchaseofplantsandequipmentworth$20millionat5%perannum.

Additionalinformation:

Royaltiespaidfromrevenue=$43,800,000

OPEX=$10MILLION

CAPEX=$50million

Salaries=$20million

Tax40%

Propertyandequipment:

Gasplantworth$13million Oilprocessingstationworth$10million

Depreciationis10%perannum

Shareholdersequity: Capitalstock:$136,922,000 Retainedearnings=netincome(profit)fromtheincomestatement

Instructions

Prepareanincome statementandbalance sheet for thecompanyHOGPLCbasedon theinformation provided in the description above. You may use the template provided along with the assignment instructionsinthissession.Ifyouchoosenottousethetemplate,besuretorefertoitandincludethe valuesforallassets,liabilities,andshareholderequity

HOG INCOME STATEMENT 31-Dec-09 2009 Revenue Oil Sales Royalties 20% of prduction Total Revenue after paying royalties Expenses CAPEX OPEX General expenditures Interest Payments Depreciation Total Expenses Earnings before tax Taxes Net Income (profit) Retained earnings (Net Income or profit) General Expenditures and Administration Salaries Fuel Stationeries Christmas Party