Prepare Income Statement, Balance Sheet and Statement of Cash Flow for 2020 using the following Trial Balance Information: 2020 2019 Account Title DR CR DR CR Accumulated Depreciation - Machinery $12,000 $6,000 Accounts Payable $4,000 $2,500 Accounts Receivable $16,000 $13,000 Cash $20,000 $7,000 Cost of Goods Sold $45,000 $55,000 Depreciation Expense $6,000 $6,000 Income Tax Expense $10,000 $5,000 Interest Expense $25,000 $22,000 Inventory $35,000 $32,000 Machinery $55,000 $50,000 Notes Payable $40,000 $30,000 Office Supplies Expense $5,000 $3,000 Prepaid Rent $2,000 $1,500 Rent Expense $10,000 $10,000 Retained Earnings** $40,000 $0 Revenues $123,000 $154,000 Share Capital (Common Shares) $25,000 $25,000 Wages Expense $15,000 $13,000 Total $244,000 $244,000 $217,500 $217,500 * the Notes Payable has a staggered maturity date (with some becoming due within one year and the remaining after one year). See below for details: % of Total Due within One Year 20.00% % of Total Due after One Year 80.00% **Retained Earnings for Balance Sheet is: Balance from Above before closing I/S Accts + Net Profit/(Loss) for Year $40,000 $7,000 Anan nel Retained Earnings ** Revenues Share Capital (Common Shares) Wages Expense Total $40,000 $0 $123,000 $154,000 $25,000 $25,000 $15,000 $13,000 $244,000 $244,000 $217,500 $217,500 * the Notes Payable has a staggered maturity date (with some becoming due within one year and the remaining after one year). See below for details: % of Total Due within One Year 20.00% % of Total Due after One Year 80.00% ** Retained Earnings for Balance Sheet is: Balance from Above before closing 1/S Accts + Net Profit/(Loss) for Year Ending Balance for Retained Earnings $40,000 $7,000 $47,000 Other Information: - Weighted Average # of Shr0/S in Yr 1,000 - Corporate Year End is December 31, 2020 - Corporation's Name is Blumen Industries PARTB Compute the following Financial Statement Ratios using the Financial Statements from PART A a) Current Ratio b) Debt-to-Equity c) Net Book Value PARTC of the three ratios mentioned above, comment on which ratio a long-term creditor is most interested in and why. Marks % Balance Sheet 28 35% Income Statement 17 21% ** Retained Earnings for Balance Sheet is: Balance from Above before closing I/S Accts + Net Profit/(Loss) for Year Ending Balance for Retained Earnings $40,000 $7,000 $47,000 Other Information: - Weighted Average # of Shr0/S in Yr 1,000 - Corporate Year End is December 31, 2020 - Corporation's Name is Blumen Industries PARTB Compute the following Financial Statement Ratios using the Financial Statements from PART A a) Current Ratio b) Debt-to-Equity c) Net Book Value PARTC Of the three ratios mentioned above, comment on which ratio a long-term creditor is most interested in and why. Marks % Balance Sheet 28 35% Income Statement 17 21% Statement of Cash flows 23 29% Ratios 9 11% Ratio comment 3 4% Total 80 100%
