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Swayers Corporation recently reported the the following 2019 balance sheet and 2019 income statement For the coming year, the company's CFO has assembled this information:

Swayers Corporation recently reported the the following 2019 balance sheet and 2019 income statement

For the coming year, the company's CFO has assembled this information:

- The company is forecasting a 25% increase in sales

- It expects that its cost of goods sold, operating expenses, assets and current liabilities will increase at the same rate as sales

- Interest expense, long term debt and capital stock are expected to remain constant.

-Tax rate is expected to remain at 30%.

- No dividends will be declared.

1. Prepare the statement of cash flows for the year 2020 using the percent of sales method (estimation method)

SWAYERS CORPORATION
BALANCE SHEET
DECEMBER 31, 2019

ASSETS

CURRENT ASSETS
CASH 114,690
ACCOUNTS RECEIVABLE 1,000

INVENTORY

1,000
TOTAL CURRENT ASSETS 116,690

FIXED ASSETS

NET FIXED ASSETS 40,000
TOTAL ASSETS 156,690
LIABILITIES
CURRENT LIABILITIES
ACCOUNTS PAYABLE 2,000
NOTES PAYABLE
TOTAL CURRENT LIABILITIES 2,000
LONG TERM DEBT 13,000
TOTAL LIABILITIES 15,000
STOCKHOLDERS' EQUITY
CAPITAL STOCK 60,000
RETAINED EARNINGS, BEGINNING 32,130
ADD: NET INCOME (LOSS) 49,560
LESS: DIVIDENDS -
RETAINED EARNINGS, END 81,690
TOTAL STOCKHOLDERS EQUITY 141,690
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY

156,690

SWAYERS CORPORATION
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2019
SALES (NET) 200,000
COST OF GOODS SOLD 100,000
GROSS PROFIT 100,000
LESS: OPERATING EXPENSES
SALARIES 12,000
GASOLINE/TRAVEL 2,000
UTILITIES 4,000
DEPRECIATION 10,000
TOTAL OPERATING EXPENSES 28,000
INCOME (LOSS) FROM OPERATIONS 72,000
LESS: INTEREST 1,200
INCOME BEFORE TAXES 70,800
LESS: TAXES (30%) 21,240
NET INCOME AFTER TAXES 49,560

SWAYERS CORPORATION
PROJECTED INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2020
SALES (NET) 250,000
COST OF GOODS SOLD 125,000
GROSS PROFIT 125,000
LESS: OPERATING EXPENSES
SALARIES 15,000
GASOLINE/TRAVEL 2,500
UTILITIES 5,000
DEPRECIATION 12,500
TOTAL OPERATING EXPENSES 35,000
INCOME (LOSS) FROM OPERATIONS 90,000
LESS: INTEREST 1,200
INCOME BEFORE TAXES 88,800
LESS: TAXES (30%) 26,640
NET INCOME AFTER TAXES 62,160

SWAYERS CORPORATION
PROJECTED BALANCE SHEET
DECEMBER 31, 2020

ASSETS

CURRENT ASSETS
CASH 143,362.50
MARKETABLE SECURITIES 23,487.50
ACCOUNTS RECEIVABLE 1,250

INVENTORY

1,250
TOTAL CURRENT ASSETS 169,350

FIXED ASSETS

NET FIXED ASSETS 50,000
TOTAL ASSETS 219,350
LIABILITIES
CURRENT LIABILITIES
ACCOUNTS PAYABLE 2,500
NOTES PAYABLE -
TOTAL CURRENT LIABILITIES 2,500
LONG TERM DEBT 13,000
TOTAL LIABILITIES 15,500
STOCKHOLDERS' EQUITY
CAPITAL STOCK 60,000
RETAINED EARNINGS, BEGINNING 81,690
ADD: NET INCOME (LOSS) 62,160
LESS: DIVIDENDS -
RETAINED EARNINGS, END 143,850
TOTAL STOCKHOLDERS EQUITY 203,850
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY

219,350

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PROJECTED STATEMENT OF CASH FLOWS FOR THE YEAR ENDING DECEMBER 31, 2020 + + -(+) -(+) -(+) +(-) +(-) Cash Flow From Operating Activities Net Income After Tax Add: Depreciation Expense Increase (decrease) in Accounts Receivable Increase (decrease) in Inventories Increase (decrease) in Other Current Assets Increase (decrease) in Accounts Payable Increase (decrease) in Accruals Increase (decrease) in Other Current Liabilities Total Cash Flow from Operating Activities Cash Flow From Investing Activities Increase (decrease) in Gross Fixed Assets Increase (decrease) in Investments Total Cash Flow From Investing Activities Cash Flow From Financing Activities Increase (decrease) in Short Term Debt Increase (decrease) in Long Term Debt Increase (decrease) in Capital Stock Dividends Paid (Withdrawals) Total Cash Flow From Financing Activities Change In Cash Add: Cash Beginning (January 1, 2020) Equals Cash Ending (December 31, 2020) -(+) +(-) +(-) (-) PROJECTED STATEMENT OF CASH FLOWS FOR THE YEAR ENDING DECEMBER 31, 2020 + + -(+) -(+) -(+) +(-) +(-) Cash Flow From Operating Activities Net Income After Tax Add: Depreciation Expense Increase (decrease) in Accounts Receivable Increase (decrease) in Inventories Increase (decrease) in Other Current Assets Increase (decrease) in Accounts Payable Increase (decrease) in Accruals Increase (decrease) in Other Current Liabilities Total Cash Flow from Operating Activities Cash Flow From Investing Activities Increase (decrease) in Gross Fixed Assets Increase (decrease) in Investments Total Cash Flow From Investing Activities Cash Flow From Financing Activities Increase (decrease) in Short Term Debt Increase (decrease) in Long Term Debt Increase (decrease) in Capital Stock Dividends Paid (Withdrawals) Total Cash Flow From Financing Activities Change In Cash Add: Cash Beginning (January 1, 2020) Equals Cash Ending (December 31, 2020) -(+) +(-) +(-) (-)

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