Project 1

Show the impact on Company A's balance sheet for a purchase of 10% of company B.

Company A paid $110,000 for the investment

You determine how Company A paid for the investment.

Show the impact on Company A's Income Statement and Balance sheet for the Company B Dividend

Total Dividend paid was $1,000,000

Project 1

Income Statement

Company B Declares a $1,000,000 Dividend

Company A

Company B

Revenues

$ 10,695,652

$ 6,920,384

Cost of Goods Sold

7,448,067

5,135,927

Gross Profit

$ 3,247,585

$ 1,784,457

Operating and Selling Expenses

2,535,373

103,558

Asset Impairment

70,226

11,376

General and Administrative Expenses

672,827

1,645,245

Net Income from Operations

$ (30,841)

$ 24,278

Non-Controlling Interest In Income

107

(12,694)

Other Income/(Loss)

(26,485)

698,748

Income Tax (Expense) Benefit

(1,697)

(248,722)

Net Income

$ (58,916)

$ 461,610

Project 1
Balance Sheet
Company A Buys 10% of Company B
			Company A		Company B
Assets
	Current Assets		$ 2,696,190		$ 1,915,316
	Investment in Company B
	Investments				992,500
	Other Intangible Assets				80,765
	Equipment		856,341		352,226
	Other Assets		360,515		266,181
	Deferred Tax Assets		33,421		177,327
	Goodwill		64,312
Total Assets			$ 4,010,779		$ 3,784,315
Liabilities
	Current Liabilities		$ 2,045,968		$ 1,056,641
	Long Term Liabilities		916,862		1,648,684
Total Liabilities			$ 2,962,830		$ 2,705,325
Stockholder's Equity
	Non-Controlling Interest		$ 107		$ 44,617
	Common Stock		2,917		217,209
	Preferred Stock		386,401		27,391
	Additional Paid In Capital		1,119,775		1,018,667
	Treasury Stock		(57,733)
	Retained Earnings		(403,518)		(228,894)
Total Stockholer's Equity			$ 1,047,949		$ 1,078,990
Total Labilities and Stockholder's Equity			$ 4,010,779		$ 3,784,315