PREPARE A BALANCE SHEET FOR THE FIRST QUARTER OF 2022 5. We purchased new equipment for...

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PREPARE A BALANCE SHEET FOR THE FIRST QUARTER OF 2022 5. We purchased new equipment for $10 million in cash. Depreciation expense on all equipment totaled $50 million during the quarter. 6. My company's long-term debt at December 31, 2021 consisted of two separate bond issues: Company's Balance Sheet as of December 31, 2021 Balance Sheet, December 31, 2021 (in millions of US dollars) Assets Cash Accounts receivable 50 Less: Allowance for doubtful accounts (2) 48 Inventory 60 Equipment 800 Less: Accumulated depreciation Total assets (220) $580 $763 Liabilities and stockholders' equity Accounts payable Date of issuance January 1, 2017 Principal $40 million Term 10 years Coupon rate (or stated rate) 6.5% payable each January 1 beginning 2018 $75 January 1, 2020 $60 million 10 years 9% payable each January 1 beginning 2021 My company issued all bonds at par so we do not amortize bond discounts or premiums. We have made all interest payments on schedule, including during the past quarter on January 1. We did not incur new debt during the quarter. Interest is accrued quarterly. 7. On March 31, we declared a $0.50 per share cash dividend to be paid in the second quarter. 8. My company paid (in cash) the December 31, 2021 balance due for income taxes. My company expects to pay income taxes due on first-quarter income in the second quarter. The income tax rate is a flat 20%. $10 Interest payable 8 Income tax payable 8 Long-term debt 100 Common stock (no par, 100 million shares authorized, issued, o/s) 300 Retained earnings Total liabilities and stockholder's equity 337 $763 Company's first quarter activity: 1. Sales totaled $200 million. All sales were on account. Cash collections totaled $175 million. 2. Allowance for doubtful accounts are set at 4% of the March 31 A/R balance. 3. Selling, general, and administrative costs totaled $20 million, all on a short-term credit basis with vendors. We paid $19 million (cash) in outstanding accounts payable during the quarter. 4. We maintain a perpetual inventory system and use the Last-in-first-out (LIFO) inventory cost flow assumption. Transactions for the quarter were as follows. All purchases were in cash. Purchases Sales 1/1 (beg. balance) 1/31 60 million @ $1.00 20 million @ $1.10 2/1 2/28 25 million @ $1.90 50 million @ $2.00 3/1 30 million @ $1.20 3/31 25 million @ $2.10 Units avail. for sale 110 million Units sold 100 million Page | 1 Page | 2 PREPARE A BALANCE SHEET FOR THE FIRST QUARTER OF 2022 5. We purchased new equipment for $10 million in cash. Depreciation expense on all equipment totaled $50 million during the quarter. 6. My company's long-term debt at December 31, 2021 consisted of two separate bond issues: Company's Balance Sheet as of December 31, 2021 Balance Sheet, December 31, 2021 (in millions of US dollars) Assets Cash Accounts receivable 50 Less: Allowance for doubtful accounts (2) 48 Inventory 60 Equipment 800 Less: Accumulated depreciation Total assets (220) $580 $763 Liabilities and stockholders' equity Accounts payable Date of issuance January 1, 2017 Principal $40 million Term 10 years Coupon rate (or stated rate) 6.5% payable each January 1 beginning 2018 $75 January 1, 2020 $60 million 10 years 9% payable each January 1 beginning 2021 My company issued all bonds at par so we do not amortize bond discounts or premiums. We have made all interest payments on schedule, including during the past quarter on January 1. We did not incur new debt during the quarter. Interest is accrued quarterly. 7. On March 31, we declared a $0.50 per share cash dividend to be paid in the second quarter. 8. My company paid (in cash) the December 31, 2021 balance due for income taxes. My company expects to pay income taxes due on first-quarter income in the second quarter. The income tax rate is a flat 20%. $10 Interest payable 8 Income tax payable 8 Long-term debt 100 Common stock (no par, 100 million shares authorized, issued, o/s) 300 Retained earnings Total liabilities and stockholder's equity 337 $763 Company's first quarter activity: 1. Sales totaled $200 million. All sales were on account. Cash collections totaled $175 million. 2. Allowance for doubtful accounts are set at 4% of the March 31 A/R balance. 3. Selling, general, and administrative costs totaled $20 million, all on a short-term credit basis with vendors. We paid $19 million (cash) in outstanding accounts payable during the quarter. 4. We maintain a perpetual inventory system and use the Last-in-first-out (LIFO) inventory cost flow assumption. Transactions for the quarter were as follows. All purchases were in cash. Purchases Sales 1/1 (beg. balance) 1/31 60 million @ $1.00 20 million @ $1.10 2/1 2/28 25 million @ $1.90 50 million @ $2.00 3/1 30 million @ $1.20 3/31 25 million @ $2.10 Units avail. for sale 110 million Units sold 100 million Page | 1 Page | 2