This assignment will culminate our accounting review. The interaction of the basic accounting reports will be reviewed and tested to complete this assignment. This assignment will provide a review of the basic accounting reports and their interactivity, as learned in your previous accounting classes. The Module 2 Statement Review information also provides background information to help with the review. An Income Statement, Balance Sheet and Cash Flow Statement examples are provided in the attached SAMPLE COMPANY Excel spreadsheet. ASSIGNMENT INSTRUCTIONS SAMPLE Proforma Income Statement.xlsx Open and download the Sample Company Excel Spreadsheet Notice the three tabs: Income Statement, Balance Sheet, Cash Flow Statement. Complete the Income Statement (In the Excel spreadsheet). Complete the Proforma Cash Flow Statement, saving it within the Excel workbook. Save the completed statement. You will attach it to the Assignment Folder. Answer the following questions by reviewing all three statements: Explain why the Owner's Equity is a negative number. Based upon the information of the Income Statement together with the Balance Sheet information, what is the depreciation schedule. (HINT: all fixed assets are on the same schedule. Enter your answers to the questions in the Assignment Text box and attach the completed Excel spreadsheet by the Due Date. PROFORMA INCOME STATEMENT EXAMPLE - COMPANY REVENUES MONTH 5 6 7 8 9 10 11 12 TOTAL YEAR (ANNUAL) 13200 13200 13860 13860 13860 14553 14553 14553 15280 15280 15280 16044 173523 400 Projected Income Product/Service 1 Projected Income from Product/Service Additional Projected Income Total Gross Revenue COST OF GOODS SOLD 200 500 13900 200 500 14560 400 500 14760 400 500 14760 400 500 1 5453 400 500 15453 400 500 15453 400 500 16180 400 500 16180 500 400 500 16944 4000 5500 183023 13200 16180 600 7883 Production Expenses Supplies and Equipment for Production. Total Cost of Good Sold 600 742 1342 742 1342 630 989 1619 630 989 1619 630 989 1619 661 1037 1698 661 1037 1698 661 1037 1698 694 1118 1812 694 1118 1812 694 1118 1812 728 1141 12057 19940 1869 GROSS PROFIT OPERATING (FIXED) EXPENSES 3328 3328 3328 1400 1400 3328 1400 716 3328 1400 3328 1400 751 650 788 3328 1400 682 650 250 650 Wages(Two part-time receptionist) Rent (Space w/3 rooms) Utilities Insurance Marketing Fees(Subscription) Debt Payments Depreciation 650 3328 1400 650 650 250 50 645 198 682 650 250 50 3328 1400 682 650 250 50 645 199 650 250 50 645 199 3328 1400 716 650 250 50 645 199 3328 1400 716 650 250 50 645 199 3328 1400 751 650 250 50 645 199 250 1400 751 650 250 50 645 199 39936 16800 8535 7800 3000 600 7740 2387 650 250 50 645 250 50 645 199 50 645 645 645 199 199 199 199 TOTAL OPERATING EXPENSES 7171 7172 7204 7204 7204 7238 7238 7238 7273 7273 7273 7310 86798 NET INCOME- PROFIT (LOSS) A 1 SIMPLE CASH FLOW STATEMENT 2 EXAMPLE - COMPANY 3 NET INCOME 5 ADJUSTMENTS: Depreciation and Amortization Deferred Taxes Decrease in Accounts Receivable Change (Increase) or decrease in inventories* $ Change (Increase) or decrease in prepaids* $ Change Increase or (decrease) in accounts payable* $ 12 Change Increase or (decrease) in Other Current Liabilities* $ 13 Change (Increase) or decrease in interest payable 14 Change (Increase) or decrease in accrued interest payable* Gain or loss) on the sale of property 16 NET CASH FLOW FROM OPERATING ACTIVITIES $ (875) (2,050) 2,500 560 15 135 17 18 19* ASSUME THE PREVIOUS BALANCE SHEET WAS O (at Startup) 20 This assignment will culminate our accounting review. The interaction of the basic accounting reports will be reviewed and tested to complete this assignment. This assignment will provide a review of the basic accounting reports and their interactivity, as learned in your previous accounting classes. The Module 2 Statement Review information also provides background information to help with the review. An Income Statement, Balance Sheet and Cash Flow Statement examples are provided in the attached SAMPLE COMPANY Excel spreadsheet. ASSIGNMENT INSTRUCTIONS SAMPLE Proforma Income Statement.xlsx Open and download the Sample Company Excel Spreadsheet Notice the three tabs: Income Statement, Balance Sheet, Cash Flow Statement. Complete the Income Statement (In the Excel spreadsheet). Complete the Proforma Cash Flow Statement, saving it within the Excel workbook. Save the completed statement. You will attach it to the Assignment Folder. Answer the following questions by reviewing all three statements: Explain why the Owner's Equity is a negative number. Based upon the information of the Income Statement together with the Balance Sheet information, what is the depreciation schedule. (HINT: all fixed assets are on the same schedule. Enter your answers to the questions in the Assignment Text box and attach the completed Excel spreadsheet by the Due Date. PROFORMA INCOME STATEMENT EXAMPLE - COMPANY REVENUES MONTH 5 6 7 8 9 10 11 12 TOTAL YEAR (ANNUAL) 13200 13200 13860 13860 13860 14553 14553 14553 15280 15280 15280 16044 173523 400 Projected Income Product/Service 1 Projected Income from Product/Service Additional Projected Income Total Gross Revenue COST OF GOODS SOLD 200 500 13900 200 500 14560 400 500 14760 400 500 14760 400 500 1 5453 400 500 15453 400 500 15453 400 500 16180 400 500 16180 500 400 500 16944 4000 5500 183023 13200 16180 600 7883 Production Expenses Supplies and Equipment for Production. Total Cost of Good Sold 600 742 1342 742 1342 630 989 1619 630 989 1619 630 989 1619 661 1037 1698 661 1037 1698 661 1037 1698 694 1118 1812 694 1118 1812 694 1118 1812 728 1141 12057 19940 1869 GROSS PROFIT OPERATING (FIXED) EXPENSES 3328 3328 3328 1400 1400 3328 1400 716 3328 1400 3328 1400 751 650 788 3328 1400 682 650 250 650 Wages(Two part-time receptionist) Rent (Space w/3 rooms) Utilities Insurance Marketing Fees(Subscription) Debt Payments Depreciation 650 3328 1400 650 650 250 50 645 198 682 650 250 50 3328 1400 682 650 250 50 645 199 650 250 50 645 199 3328 1400 716 650 250 50 645 199 3328 1400 716 650 250 50 645 199 3328 1400 751 650 250 50 645 199 250 1400 751 650 250 50 645 199 39936 16800 8535 7800 3000 600 7740 2387 650 250 50 645 250 50 645 199 50 645 645 645 199 199 199 199 TOTAL OPERATING EXPENSES 7171 7172 7204 7204 7204 7238 7238 7238 7273 7273 7273 7310 86798 NET INCOME- PROFIT (LOSS) A 1 SIMPLE CASH FLOW STATEMENT 2 EXAMPLE - COMPANY 3 NET INCOME 5 ADJUSTMENTS: Depreciation and Amortization Deferred Taxes Decrease in Accounts Receivable Change (Increase) or decrease in inventories* $ Change (Increase) or decrease in prepaids* $ Change Increase or (decrease) in accounts payable* $ 12 Change Increase or (decrease) in Other Current Liabilities* $ 13 Change (Increase) or decrease in interest payable 14 Change (Increase) or decrease in accrued interest payable* Gain or loss) on the sale of property 16 NET CASH FLOW FROM OPERATING ACTIVITIES $ (875) (2,050) 2,500 560 15 135 17 18 19* ASSUME THE PREVIOUS BALANCE SHEET WAS O (at Startup) 20
