Take the following information on a company and prepare its balance sheet just past the end of its fifth year. To make things simpler, also assume a year with 12 months of exactly 30 days each. a. The company has gross sales of $114 thousand per month and the pattern of sales is even, i.e. there is no cyclical pattern to sales. b. COGS for the business is 50% and is 75% materials. c. There is enough raw material on hand to support 3 months of manufacturing, and there are enough finished goods in the warehouse to accommodate 1 month of orders. d. For simplicity, assume we have no work in progress. e. The company pays its suppliers one month after goods are received. f. Customers are large firms, which pay us 2 months after we deliver our product. g. The owners started the business with an initial capital injection of $1.5 million and a $750 thousand long-term bank loan, just over 5 years ago. h. The bank loan principle is payable in 10 equal annual payments, and the 5th annual payment has recently been made. i. In the first 5 years of the business, the company had a cumulative net income of $500 thousand, and paid dividends of $50 thousand for the first time this past year. j. Monthly payroll is $44 thousand, paid monthly. We're currently half way between pay cycles. k. All utilities and those types of bills have just recently been paid. 1. The company bought $2 million in assets at startup and picked a straightline depreciation period of 20 years. No additional assets have been purchased. m. The business has $500 thousand in cash on hand and a short-term credit line that is paid down and/or drawn from based on the fluctuations of the business. n. There are no short or long term investments, no prepaid expenses, no goodwill, and no repayable grants, and taxes are up to date. Notes: 1. Use the information provided in the problem statement to assign the quantities for the various accounts in the balance sheet below. 2. Calculate the required quantities to indicate the correct amount on each of blanks in the balance sheet for those accounts. 3. Express your quantities in your answer in thousands ($000). 4. If needed, round your answer to 2 decimal places. Balance Sheet - $(000) Assets Current Assets: Cash Receivables Short-Term Investments Inventory Prepaid Expenses Fixed Assets: Land, Bld.&Equip.@Cost Less Accumulated Depreciation Total Fixed Assets Long-Term Investments Goodwill Total Assets e.g. 500 Liabilities Current Liabilities: Short-Term Credit Line Accounts Payable Accrued Expenses Taxes Payable Current Portion Long-Term Debt Sum of the Current Liability Long Term Liabilities: Repayable Grants Long-Term Debt Shareholders Equity: Capital Shares Retained Earnings Total Liabilities And Equity 1 Take the following information on a company and prepare its balance sheet just past the end of its fifth year. To make things simpler, also assume a year with 12 months of exactly 30 days each. a. The company has gross sales of $114 thousand per month and the pattern of sales is even, i.e. there is no cyclical pattern to sales. b. COGS for the business is 50% and is 75% materials. c. There is enough raw material on hand to support 3 months of manufacturing, and there are enough finished goods in the warehouse to accommodate 1 month of orders. d. For simplicity, assume we have no work in progress. e. The company pays its suppliers one month after goods are received. f. Customers are large firms, which pay us 2 months after we deliver our product. g. The owners started the business with an initial capital injection of $1.5 million and a $750 thousand long-term bank loan, just over 5 years ago. h. The bank loan principle is payable in 10 equal annual payments, and the 5th annual payment has recently been made. i. In the first 5 years of the business, the company had a cumulative net income of $500 thousand, and paid dividends of $50 thousand for the first time this past year. j. Monthly payroll is $44 thousand, paid monthly. We're currently half way between pay cycles. k. All utilities and those types of bills have just recently been paid. 1. The company bought $2 million in assets at startup and picked a straightline depreciation period of 20 years. No additional assets have been purchased. m. The business has $500 thousand in cash on hand and a short-term credit line that is paid down and/or drawn from based on the fluctuations of the business. n. There are no short or long term investments, no prepaid expenses, no goodwill, and no repayable grants, and taxes are up to date. Notes: 1. Use the information provided in the problem statement to assign the quantities for the various accounts in the balance sheet below. 2. Calculate the required quantities to indicate the correct amount on each of blanks in the balance sheet for those accounts. 3. Express your quantities in your answer in thousands ($000). 4. If needed, round your answer to 2 decimal places. Balance Sheet - $(000) Assets Current Assets: Cash Receivables Short-Term Investments Inventory Prepaid Expenses Fixed Assets: Land, Bld.&Equip.@Cost Less Accumulated Depreciation Total Fixed Assets Long-Term Investments Goodwill Total Assets e.g. 500 Liabilities Current Liabilities: Short-Term Credit Line Accounts Payable Accrued Expenses Taxes Payable Current Portion Long-Term Debt Sum of the Current Liability Long Term Liabilities: Repayable Grants Long-Term Debt Shareholders Equity: Capital Shares Retained Earnings Total Liabilities And Equity 1
