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Washington Irving, Inc. Comparative Balance Sheets As of January 31, 2018 2017 2016 Assets Current Assets: Cash and cash equivalents Accounts receivable (Net) Inventory Notes receivable Investments Total current assets Non-current Assets Property, plant, and equipment (Net) Right-of-use asset Investments Goodwill and intangible assets Deferred income taxes Total non-current assets Total Assets Current Liabilities: Accounts payable Notes payable Income taxes payable Current lease payable Current maturity of long-term debt Total current liabilities Non-current Liabilities Long-term debt (net) Pensions Leases Payable Deferred income taxes Liability - RSU Plan Liability - Potential Additional Tax Total noncurrent liabilities Total Liabilities Common Stock, $0.01 par value Additional paid-in capital Retained earnings Accumulated other comprehensive income (loss) Total Equity Total Liabilities and Equity \begin{tabular}{rrrr} $ & 754,535.50 & $ & 469,037.50 \\ $ & 257,070.00 & $ & 233,450.00 \\ $ & 1,797,510.00 & $ & 1,488,600.00 \\ $ & 311,700.00 & $ & 339,200.00 \\ $ & 995,090.00 & $ & 1,068,750.00 \\ \hline$ & 4,115,905.50 & $ & 3,599,037.50 \\ $ & 12,193,000.00 & $ & 12,700,000.00 \\ & $205,420.97 & $ & - \\ $ & 3,709,800.00 & $ & 3,631,150.00 \\ $ & 2,300,000.00 & $ & 2,360,000.00 \\ $ & 29,562.50 & $ & \\ \hline$ & 18,437,783.47 & $ & 18,691,150.00 \\ \hline$ & 22,553,688.97 & $22,290,187.50 \\ \hline \hline \end{tabular} Liabilities and Equity \begin{tabular}{rrrc} $ & 12,193,000.00 & $ & 12,700,000.00 \\ & $205,420.97 & $ & - \\ $ & 3,709,800.00 & $ & 3,631,150.00 \\ $ & 2,300,000.00 & $ & 2,360,000.00 \\ $ & 29,562.50 & $ & - \\ \hline$ & 18,437,783.47 & $ & 18,691,150.00 \\ \hline$ & 22,553,688.97 & $ & 22,290,187.50 \\ \hline \hline \end{tabular} \begin{tabular}{rrrr} $ & 242,100.00 & $ & 230,100.00 \\ $ & 258,300.00 & $ & 280,900.00 \\ $ & - & $ & 3,477.00 \\ $ & 72,500.00 & $ & - \\ $ & 256,900.00 & $ & - \\ \hline$ & 829,800.00 & $ & 514,477.00 \\ $ & & & \\ $ & 6,574,310.00 & $ & 4,861,100.00 \\ $ & 132,920.97 & $ & - \\ $ & 51,860.00 & $ & 47,270.00 \\ $ & 50,000.00 & $ & - \\ $ & 21,000.00 & $ & - \\ \hline$ & 11,132,680.97 & $ & 11,059,500.00 \\ \hline$ & 11,962,480.97 & $ & 11,573,977.00 \\ $ & 14,972.50 & $ & 14,897.50 \\ $ & 10,906,590.00 & $ & 10,829,790.00 \\ $ & (158,024.50) & $ & 3,603.00 \\ $ & (172,330.00) & $ & (132,080.00) \\ \hline$ & 10,591,208.00 & $ & 10,716,210.50 \\ $ & 22,553,688.97 & $ & 22,290,187.50 \\ \hline \hline \end{tabular} Washington Irving, Inc. Comparative Statements of Comprehensive Income For the Year Ending January 31, 2018 Gross sales Less: Sales returns (1) Net sales Cost of goods sold Gross profit Operating expenses: Selling expenses General and administrative expenses Research and development expenses Goodwill impairment Depreciation expense Amortization expense (leases) Bad debts expense Total operating expenses Operating income Other income (expense): Interest and dividend revenue Gain (loss) on sale of TS investments Gain (loss) on sale of property Unrealized holding gain (loss) on TS investments Interest expense Total other income (expense), net Income before income taxes Income tax expense (benefit) Net income Other Comprehensive Income Defined benefit plans, net Unrealized holding gain (loss) on AFS investments Comprehensive income (loss) Washington Irving, Inc. Statements of Equity For the Year Ending January 31, 2018 Note: The loss on sale of TS investments is for securities originally purchased for $40,000 and sold for $85,000 $32,000 of interest revenue is nontaxable Cash sales were $3,265,900, the rest were sales on account The deferred tax liability is due to differences in tax to book depreciation methods Included in accounts payable are all relevant current liabilities payable, excepting income taxes payable No new long-term debt was issued during the year. G\&A includes pension expense of $85,410 Contributions to pension plan assets of $52,850 were made this year G\&A expenses include $50,000 in RSUs payable in either equity or cash and $25,000 payable only in equity $85,260 of the returns were for sales on account Leases have a four year lease term with one payment due immediately and then due at Feb 1 of each year thereafte Assume that the goodwill on the balance sheet is NEVER tax deductible and ignore all other temporary differences The loss on the sale of property is for PP\&E which was sold for $289,500 Washington Irving, Inc. Comparative Balance Sheets As of January 31, 2018 2017 2016 Assets Current Assets: Cash and cash equivalents Accounts receivable (Net) Inventory Notes receivable Investments Total current assets Non-current Assets Property, plant, and equipment (Net) Right-of-use asset Investments Goodwill and intangible assets Deferred income taxes Total non-current assets Total Assets Current Liabilities: Accounts payable Notes payable Income taxes payable Current lease payable Current maturity of long-term debt Total current liabilities Non-current Liabilities Long-term debt (net) Pensions Leases Payable Deferred income taxes Liability - RSU Plan Liability - Potential Additional Tax Total noncurrent liabilities Total Liabilities Common Stock, $0.01 par value Additional paid-in capital Retained earnings Accumulated other comprehensive income (loss) Total Equity Total Liabilities and Equity \begin{tabular}{rrrr} $ & 754,535.50 & $ & 469,037.50 \\ $ & 257,070.00 & $ & 233,450.00 \\ $ & 1,797,510.00 & $ & 1,488,600.00 \\ $ & 311,700.00 & $ & 339,200.00 \\ $ & 995,090.00 & $ & 1,068,750.00 \\ \hline$ & 4,115,905.50 & $ & 3,599,037.50 \\ $ & 12,193,000.00 & $ & 12,700,000.00 \\ & $205,420.97 & $ & - \\ $ & 3,709,800.00 & $ & 3,631,150.00 \\ $ & 2,300,000.00 & $ & 2,360,000.00 \\ $ & 29,562.50 & $ & \\ \hline$ & 18,437,783.47 & $ & 18,691,150.00 \\ \hline$ & 22,553,688.97 & $22,290,187.50 \\ \hline \hline \end{tabular} Liabilities and Equity \begin{tabular}{rrrc} $ & 12,193,000.00 & $ & 12,700,000.00 \\ & $205,420.97 & $ & - \\ $ & 3,709,800.00 & $ & 3,631,150.00 \\ $ & 2,300,000.00 & $ & 2,360,000.00 \\ $ & 29,562.50 & $ & - \\ \hline$ & 18,437,783.47 & $ & 18,691,150.00 \\ \hline$ & 22,553,688.97 & $ & 22,290,187.50 \\ \hline \hline \end{tabular} \begin{tabular}{rrrr} $ & 242,100.00 & $ & 230,100.00 \\ $ & 258,300.00 & $ & 280,900.00 \\ $ & - & $ & 3,477.00 \\ $ & 72,500.00 & $ & - \\ $ & 256,900.00 & $ & - \\ \hline$ & 829,800.00 & $ & 514,477.00 \\ $ & & & \\ $ & 6,574,310.00 & $ & 4,861,100.00 \\ $ & 132,920.97 & $ & - \\ $ & 51,860.00 & $ & 47,270.00 \\ $ & 50,000.00 & $ & - \\ $ & 21,000.00 & $ & - \\ \hline$ & 11,132,680.97 & $ & 11,059,500.00 \\ \hline$ & 11,962,480.97 & $ & 11,573,977.00 \\ $ & 14,972.50 & $ & 14,897.50 \\ $ & 10,906,590.00 & $ & 10,829,790.00 \\ $ & (158,024.50) & $ & 3,603.00 \\ $ & (172,330.00) & $ & (132,080.00) \\ \hline$ & 10,591,208.00 & $ & 10,716,210.50 \\ $ & 22,553,688.97 & $ & 22,290,187.50 \\ \hline \hline \end{tabular} Washington Irving, Inc. Comparative Statements of Comprehensive Income For the Year Ending January 31, 2018 Gross sales Less: Sales returns (1) Net sales Cost of goods sold Gross profit Operating expenses: Selling expenses General and administrative expenses Research and development expenses Goodwill impairment Depreciation expense Amortization expense (leases) Bad debts expense Total operating expenses Operating income Other income (expense): Interest and dividend revenue Gain (loss) on sale of TS investments Gain (loss) on sale of property Unrealized holding gain (loss) on TS investments Interest expense Total other income (expense), net Income before income taxes Income tax expense (benefit) Net income Other Comprehensive Income Defined benefit plans, net Unrealized holding gain (loss) on AFS investments Comprehensive income (loss) Washington Irving, Inc. Statements of Equity For the Year Ending January 31, 2018 Note: The loss on sale of TS investments is for securities originally purchased for $40,000 and sold for $85,000 $32,000 of interest revenue is nontaxable Cash sales were $3,265,900, the rest were sales on account The deferred tax liability is due to differences in tax to book depreciation methods Included in accounts payable are all relevant current liabilities payable, excepting income taxes payable No new long-term debt was issued during the year. G\&A includes pension expense of $85,410 Contributions to pension plan assets of $52,850 were made this year G\&A expenses include $50,000 in RSUs payable in either equity or cash and $25,000 payable only in equity $85,260 of the returns were for sales on account Leases have a four year lease term with one payment due immediately and then due at Feb 1 of each year thereafte Assume that the goodwill on the balance sheet is NEVER tax deductible and ignore all other temporary differences The loss on the sale of property is for PP\&E which was sold for $289,500