The balance sheet of DCC Corp., as of the end of Quarter 2, is provided below.

Assets

Liab. & Owners Equity

Cash

$11,300

Accounts payable

$500

A/R

$1,000

Inventory

Long-term debt

$8,000

parts

$600

Common Stock

$4,000

finished goods

$6,000

($2 par value)

Paid-in-surplus

$5,000

Retained Earnings

$1,400

Total Assets

$18,900

Liab. & Owners Equity

$18,900

During Quarter 3:

DCC purchased $3000 worth of parts, $1400 with cash, the remainder to be paid in Quarter 4.

Sold 6 computers, each for $750.

4 were sold for cash, 2 were sold on credit with payment to be received in Quarter 4.

The gross margin was 36%

Annual interest rate on LTD was 3.2%. Interest is paid and expensed quarterly.

SG&A expenses = $600 was paid in Quarter 3

The tax rate is 35% and Quarter 3 taxes will be paid in Quarter 4

The dividend payout ratio (dividends/Net Income) is 30% (paid immediately)

200 new shares of common stock were issued and sold for $1200 in Quarter 3

Purchased the warehouse DCC is located in for $20,000 cash on the first day of Quarter 3

$12,000 long-term debt was issued on the first day of the quarter

The warehouse will be depreciated over 20 years. Depreciation is expensed quarterly. (Hint: Depreciated with straight line, i.e., every period the same amount. There are 20*4=80 periods, since quarterly for 20 years).

Create the Q3 income statement and the Q3 ending balance sheet.

Income Statement
	Quarter 3
Sales	$4,500
COGS	$1,620
SG&A	$600
Dep Exp	$250
Operating Profit	$1,030
Interest Expense	$64
Income Before Tax	$936
Provision For Tax	($327)
Net Income	$609
Dividends	($182)
Retained Earnings	$427

Balance Sheet
Asset		Quarter 2	Quarter 3
Cash		$11,300	$11,300
Account Receivable		$1,000	$1,000
Inventory
	Parts	$600	$600
	Finish Goods	$6,000	$6,000
Total Current Asset		$18,900	$18,900
Warehouse		$0	$20,000
Total Assets		$37,800	$57,800

Liabilities & Equity
		Quarter 2	Quarter 3
Account payable		$500	$500
Tax Payable
Long term debt		$8,000	$20,000
Total Liability
Common Stock		$4,000	$5,200
Retained Earnings		$1,400	$1,645
Paid-in-Surpus		$5,000	$5,000
Total Liabilities & Equity		$18,900	$32,345

Statement of Cash Flow
	Quarter 3
Net Income	$609
Increase in Parts	$2,400
Decreased Finished Goods	($750)
Depreciation	$250
Increase in receivable
Increase in payable
Increase in tax payable
Cash flow from operations
Purchase warehouse	$20,000
Cash flow from investing	($20,000)
Sale of bonds
Issuing Common Stock	$1,200
Cash dividends
Cash flow from financing
Cash flow from operations
Cash flow from investing
Cash flow from financing
Total Cash Flow
Beginning Cash
Total Cash Flow
End