It is Dec 31, 2015 and Mr. X is reflecting on the first year of his new business, OBD Inc. He has hired you to create financial statements for the company and you agree. You interview him and he shares with you a great deal of information which is listed below. He asks that you compile an income statement and balance sheet.

Sales were $1,000,000

Gross profit margin was 60%

Operating margins were 12%

The Bank of Toronto provided a loan on Jan 1, 2015 worth $300,000. The annual interest is 8% and is compounded annually. Interest only payments are needed until the loan is due in 10 years, where a balloon payment for the full balance must be paid.

The combined federal and provincial tax rates is 27%

Mr. X knows that the ending cash balance in his company is 200,000.

Accounts Receivables is 10% of sales

Inventory is 15% of sales

Accounts Payable is 5% of sales

Accrued expenses payable is 5.5% of sales

Capital equipment purchases were made at the start of the year. These total $50,000. These depreciate at 10% per year

Mr. X will provided all other capital in the form of equity financing

As a smart young consultant, Mr. X has asked you to figure out his SG&A (Selling General and Administrative expenses).