Mrs. Hip is going to open a music store with CDs. She has got CZK 300 000 from her savings, which she wants to invest into her business and she has also received a bank loan in the amount of CZK 150 000. She bought the equipment (CZK 150 000), CZK 250 000 she spent on the CDs. The space for the shop will be rented and she will pay the rent immediately in the month she uses the space i.e. June rent will be paid in June etc. 1) Prepare the opening balance sheet of Mrs. Hip. Do not forget to comply with the European or the American habits. (15 points) We are at the end of the first month of her operations. She sold one third of her CDs, which she bought at the beginning to satisfy her customers. Individual customers paid in cash, but she also sold some CDs to disco clubs and these customers received invoices, which are due in two months. The table below summarizes her revenues in the first month: individual customers CZK 65 000 disco club 1 CZK 100 000 disco club 2 CZK 60 000 At the end of the month Mrs. Hip paid in cash a rent (CZK 15 000) and bank loan interest (CZK 1000). Her salary (CZK 40 000) will be paid during the second month of her operations. She has also received an invoice for utilities used during the first month (CZK 2 000), which will be paid in 30 days. Equipment is depreciated using straight line method for 24 months starting from the first month (now). During the first month she bought new CDs in the value of CZK 90 000. Bank loan is not repaid at the moment, but she has to pay the interest. Tax rate is 20% and will be paid immediately in cash.

2) Prepare her income statement (10 points) for the first month. 3) Prepare her cash flow statement using direct method for the first month (10 points), you do NOT have to include different CF levels (operating, financing, investing), only list the items (plus minus). 4) Prepare a balance sheet as of the end of the first month based on the information above incl. receivables/payables/cash balance/retained earnings etc. Do not forget to comply with the European or the American habits. (16 points) 5) Answer following questions: How much is her gross profit at the end of the first month ? (3 points) How much is her EBITDA at the end of the first month? (3 points) How much is her EBIT at the end of the first month? (3 points)