This assignment is a continuation of assignment 1. He bought the building for $150,000 total and has divided in into land of $50,000 and the building at $100,000. The building is on a 20 year depreciation schedule, and the production equipment has a 7 year depreciation schedule. You need to use the other information from that assignment to complete this one. He only sells what he makes – no finished inventory. His is a sole proprietor business, so the business itself does not pay any corporate taxes.
- Using the following information, construct a table showing three income statements for the periods April 1 – June 30, July 1 – September 30, and October 1 – December 31, year 1.
- Using the following information, construct three more balance sheets for the same periods using the one from April 1 as a starting balance sheet.
April 1 – June 30
Sales: $100,000 ($75,000 cash, $25,000 accounts receivables)
Purchases:
Inventory: $27,000 (Assume he exactly replenishes his inventory as he uses it.)
Truck: $35,000 cash on April 2. 5 year depreciation schedule.
July 1 – September 30
Sales: $120,000 ($90,000 cash, $30,000 accounts receivables). Received $20,000 from prior period account’s receivables.
Purchases: Inventory: $32,000
October 1- December 31
Sales: $150,000 ($120,000 cash, $30,000 accounts receivables). Received $5000 from April- June period accounts receivables and $10,000 from July – September accounts receivables.
Purchases: $50,000 in inventory
Monthly Expenses for all months:
Total manufacturing wages including social security and Medicare tax: $8,000.
Total administrative salaries and wages including social security and Medicare tax: $5000
Utilities: $450
Insurance: $2000
Advertising: $1200
Legal and accounting: $500
Miscellaneous: $500
| April 1 – June 30 | July 1 – Sep 30 | Oct 1 – Dec 31 | |
| Sales | |||
| COGS | |||
| Gross Op Profit | |||
| Selling & admin exp | |||
| Depreciation | |||
| Other net income/exp | |||
| EBIT | |||
| Int Expense | |||
| Net Income | |||
| Withdrawls | |||
| Addition to Ret Earn |
P(5.u)
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