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4400 1. Using the data presented below: Aspen Industries Income Statement For the Years Ended December 31, 2004 and 2003 2004 2003 Sales 285,000 190,000 Cost of Goods Sold 215.000 143000 Gross Profit 70,000 47,000 Operating Expenses Variable Expenses 28,500 19,000 Fixed Expenses 21,000 20,000 Depreciation 10,000 4,500 Total 59,500 43,500 Earnings Before Interest and Taxes 10,500 3,500 Interest Expense 6,100 3,000 Earnings Before Taxes 500 Taxes 1,540 175 Net Income 2,860 325 Notes: Tax Rate 35% Payout Ratio 30% Dividends 858 Aspen Industries Balance Sheet As of December 31, 2004 and 2003 2004 2003 Assets Cash 4,000 9,000 Accounts Receivable 16,000 12,500 Inventories 42.500 29.000 Total Current Assets 62.500 50,500 Land 26,000 20,000 Buildings and Equipment 100,000 70,000 Accumulated Depreciation (38000) (28,000) Total Fixed Assets 88.000 62.000 Total Assets 150,500 112.500 Liabilities and Owner's Equity Accounts Payable 22,298 10,500 Short-term Bank Notes 47.000 17000 Total Current Liabilities 69,298 27,500 Long-term Debt 22,950 28,750 Common Stock 31,500 31,500 Retained Earnings 26,752 24.750 Total Liabilities and Owner's Equity 150.500 112,500 a. Recreate the income statement and balance sheet using formulas wherever possible. Each statement should be on a separate worksheet. Try to duplicate the formatting exactly. b. On another worksheet, create a statement of cash flows for 2004. Do not enter any numbers directly on this worksheet. All formulas should be linked directly to the source on previous worksheets. c. Using Excel's outlining feature, create an outline on the statement of cash flows that, when collapsed, shows only the subtotals for each section. d. Suppose that sales were $320,000 in 2004 rather than $285,000. What is the 2004 net income and retained earnings? e. Undo the changes from Part d, and change the tax rate to 40%. What is the 2004 net income and retained earnings? 2. Using the data from the previous problem: a. Create a common-size income statement for 2003 and 2004. This statement should be created on a separate worksheet with all formulas linked directly to the income statement. b. Create a common-size balance sheet for 2003 and 2004. This statement should be created on a separate worksheet with all formulas linked directly to the balance sheet