Sullivan Enterprises, Inc. (SE) HAS THE FOLLOWING BALANCE SHEET AS OF 12/31/2020.

Create the income statement and balance sheet for 12/31/2021 using the "Financial Identity Method"?

Cash

$15,000

Accounts Payable (used exclusively for inventory)

$8,000

Accounts Receivable

4,000

Accruals

800

Inventory

8,000

Notes Payable

1,000

Fix Assets

10,500

Common Stock

14,200

Retained Earnings

13,500

Total Assets

$37,500

Total Liabilities and Equity

$37,500

The following reflects the forecast for 2021.

SE expects sales of $12,000 per month and a Cost of Goods Sold (COGS) of $7,000 per month.

The $7,000 per month of COGS can be broken down into $4,000 per month for material costs and $3,000 per month in labor costs.

There will be 7 days of labor costs outstanding at the end of the year.(Assume 260 labor days for the year).

SE purchases materials 1 month prior to sale and pays for it 1 month after sale.

SE is estimating selling, general, and administrative (SG&A) expenses at $3,000 per month.

Depreciation expense is expected to be $500 per month.

SE's tax rate is 40% and will pay all taxes owed by the end of 2021.

SE's $1,000 notes payable, of which they will pay interest at a rate of 5%, will be paid off by the end of 2021.

Their sales are on credit and customers pay SE 1 month after the sale.

SE plans to add equipment at year-end that will cost them $8,000.

They plan to pay $2,000 down in cash for the machine and they will issue common stock for the remaining $6,000.

SE will pay out 10% of earnings after taxes (EAT) as a dividend.

Create the income statement and balance sheet for 12/31/2021 using the Financial Identity Method

Sulivan Enterprises Income Statement 2021 Sales 144.000 -COGS Gross Marg!!........-.= -SG&A Expense - Depreciation EBIT -Interest EBT -Taxes [EAT Dividends 1,077 Change in Retained Earnings 9,693 Balance Sheet Cash AR Inv AP Accruals LTD CS RE Beg. Balance 12/31/2020 15,000 $ 4,000 5 8,000 5 10,500 $ 8,000 $ 800 $ 1,000 $ 14,200 $ 13,500 Pay Accruals Collect AR's Production: Materials Purch Production: Labor Payments for APig Payments for Labor Buy Machine Pay Off Note Sales COGS SG&A Expense Depreciation Interest Taxes Dividends Ending Balance 12/31/2021 $19,862 $12,000 $8,000 $12,500 $8,000 $969 $20,200 $ 23,19: Totals $52,362 $52,362