Question 1.

At the end of 2018, the Luck Company has $40,000 in accumulated depreciation and $100,000 in retained earnings.

2019 2020

Sales $250,000 $300,000

Notes Payable 20,000 50,000

Tax Rate 40% 40%

Gross Fixed Assets $500,000 $590,000

Total Current Liabilities 100,000 110,000

Interest Expense 30,000 35,000

Cash 20,000 30,000

Accounts Payable 30,000 20,000

COGS 30% of Sales 30% of Sales

Total Current Assets 100,000 150,000

Total Debt 200,000 240,000

Net Income 42,000 48,000

Accounts Receivable 30,000 20,000

Addition to Retained 20,000 26,000

Earnings

Complete the Balance Sheet and Income Statement for 2019 and 2020

-You deposit $30,000 today. If it grows to $60,000 in 10 years, what rate of interest must have your earned?

-Today is T=0. If you make five annual deposits into a bank account that pays interest at the rate of 9%, how large must the deposits be if the account is worth $75,000 at the end of the fifth year (T=5) and the first deposit is made today?

-You will start college on your 18^th birthday. Your parents need $100,000 on that day. How much should they deposit into a bank account at the moment of your birth if the bank pays interest at the rate of 6%?

use the data provied to complete income statement and balance sheet then answer questions based off of the new income statement and balance sheet