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Statement of Income Revenue Cost of sales Gross profit Operating expenses Profit before taxes Income tax expense Profit for the year $ 3,000,000 (2,000,000) 1,000,000

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Statement of Income Revenue Cost of sales Gross profit Operating expenses Profit before taxes Income tax expense Profit for the year $ 3,000,000 (2,000,000) 1,000,000 (650,000) 350,000 (150,000) $ 200,000 Statement of Financial Position $ 800,000 Non-current assets Inventories Trade receivable $ 1,200,000 400,000 380,000 800,000 Equity Long-term borrowings Trade and other payables Short-term borrowings 100,000 Cash $ 20,000 $ 300,000 Short-term borrowings interest rate 8 % (before tax) Long-term borrowings interest rate 6% (before tax) Shareholders expected return on investment 12% Statement of Income Revenue Cost of sales Gross profit Operating expenses Profit before taxes Income tax expense Profit for the year $ 3,000,000 (2,000,000) 1,000,000 (650,000) 350,000 (150,000) $ 200,000 Statement of Financial Position $ 800,000 Non-current assets Inventories Trade receivable $ 1,200,000 400,000 380,000 800,000 Equity Long-term borrowings Trade and other payables Short-term borrowings 100,000 Cash $ 20,000 $ 300,000 Short-term borrowings interest rate 8 % (before tax) Long-term borrowings interest rate 6% (before tax) Shareholders expected return on investment 12%

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