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Magic GMBA 4 Corporation ? ? Income Statements For the Years Ended December 3 1 , 2 0 2 0 and 2 0 1 9

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 Use the information provided to work with your group to:
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.)

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