Statement of Cash Flows - APPENDIX A Operating Activities: Net Profit (Loss) in Year Depreciation Expense Changes to Non-Cash Working Capital: Inventories Prepaid Expenses Accounts Payable Wages Payable Total Inflow(Outflow) from Operating Investing Activities: Sale (Purchase) of Equipment Total Inflow(Outflow) from Investing Financing Activities: Dividends Paid to Shareholders Total Inflow (Outflow) from Financing Net Inflow[Outflow) of Cash Beginning Cash Balance Ending Cash Balance Statement of Financial Position - APPENDIX A Assets Current Assets Cash Inventories Prepaid Expenses Projection Actual (Most Recent Year) Projection $10,000 14,000 3,000 $27,000 Total Current Assets Non-Current Assets Equipment $85,000 Accumulated Depreciation - Equipment -25,000 $60,000 Building $200,000 Accumulated Depreciation - Building -120,000 80,000 Land 125,000 Total Non-Current Assets $265,000 Total Assets $292,000 Liabilities Current Liabilities Accounts Payable $5,000 Wages Payable 1,000 Total Current Liabilities $6,000 Non-Current Liabilities None Total Non-Current Liabilities Total Liabilities $6,000 Shareholders' Equity Share Capital Retained Earnings Total Shareholders' Equity $100,000 186,000 $286,000 Total Liabilities and Shareholders' Equity $292,000 APPENDIX A Assumptions (Statement of Financial Position): #1) The ending Cash Balance should match and cross reference to the Cash Flow Statement (Appendix A). #2) To reduce the risk of stock-outs (no inventory available for sale), you'll keep more inventory. Increase Inventory by: 10.00% Year over Year #3) To better manage your cash flow, you won't prepay as many expenses. Decrease Prepaid Expenses by: #4) New Equipment was purchased in the year for: $1,500 $10,000 There were no other equipment, building, or land additions or dispositions in the year. #4) Wages Payable will drop to NIL #5) Accounts Payable will increase by: 40.00% Year over Year APPENDIX A Assumptions (Statement of Changes in Equity): #1) To meet your personal cash flow needs, you plan on taking a dividend from the corporation. Dividend Declared and Paid in Q1 (Jan-Mar) $15,000 Dividend Declared and Paid in Q2 (Apr-Jun) 20,000 Dividend Declared and Paid in Q3 (Jul-Sep) 30,000 20,000 $85,000 Dividend Declared and Paid in Q4 (Oct-Dec) Total Dividends for Year #2) No additional shares will be issued or retired in the Projection Year. Statement of Changes in Equity - APPENDIX A - Projection Balance at Beginning of Year Net Profit (Loss) Dividends to Shareholders Shares Issued (Retired) Balance End of Year Share Capital $100,000 Retained Earnings $186,000 Total $286,000 APPENDIX A Assumptions (Income Statement): #1) With additional advertising, you believe you can increase awareness of your store resulting in higher sales. You estimate the following: Increase Advertising by: $2,000 1.00% increase in Sales Year over Year Results in a #2) You are considering sourcing your inventory from another supplier. Your Gross Margin Percentage is expected to change to: 58% #3) You plan on performing more of the work at the store yourself and can therefore cut down on your salaries expense. This will result in the following $12,000 in annual savings #5) You purchased new equipment in the year. Dep Exp - Equipment will go up by: #6) All other operating expenses are expected to remain the same total dollar amount year over year. #7) Income Tax Expense will remain at 20% of Profit Before Taxes. Statement of Income APPENDIX A $1,000 Revenue Cost of sales Actual (Most Recent Year) Projection $400,000 180,000 $220,000 Gross profit Expenses Salaries Insurance Utilities $95,000 3,500 2,700 Property Taxes 3,600 Advertising Depreciation - Equipment 2,000 1,000 Depreciation - Building Miscellaneous Expenses 4,000 15,000 126,800 Profit before taxes. Income tax expense (20%) Profit for the year $93,200 18,640 $74,560