4 30 points a Use the following information for Company X to

4. (30 points) a) Use the following information for Company X to create the Balance Sheet and the Income Statement for 2014 . Tax rate is 30% for both 2013 and 2014, In 2013 depreciation was 2000 Sales for the year Accumulated Cost of Goods Sold for the year Other Expenses for the year Interest for the vear 2013 8,700 14,500 2014 16,500 350 ciation as of Dec 31st 820 750 Accounts Receivable as of Dec 31st Short-term Notes Payable as of Dec 31st Long-term Debt as of Dec 31s Total Fixed Assets as of Dec 31st Accounts Payable as of Dec 31s Inventory as of Dec 31st Dividends for the year 4,800 490 16,961 31,500 4,290 880 1,700 720 19,350 810 1,630 b) Company X has not issued or bought back new stock since 2000. Calculate total equity for 2012

Solution

BALANCE SHEET For the year Ended 31st December 2013 & 2014 2013 2014 Amount Amount FIXED ASSETS Total Fixed Assetss $32,800 $31,500 Less : Accumulated Depreciation $14,500 $16,500 Total Fixed Assets - Net $18,300 $15,000 CURRENT ASSETS Accont Receivable $3,600 $4,800 Cash $3,400 $3,100 Inventory $810 $880 TOTAL OF ASSETS $26,110 $23,780 LIABILITIES AND ONWER\'S EQUITY CURRENT LIABILITIES Account Payable $4,870 $4,290 Short Term Note Payable $720 $490 Long Term Debt $19,350 $16,961 STOCK OWNER\'S CAPITAL Common Stock ( For 2013 =Total Assets - Current liability - Long Term liabilitiy - Retaiend Earning ) $749 $749 Retained Earnings $421 $1,290 TOTAL OF SHAREHOLDERS EQUITY TOTAL OF EQUITY AND LIABILITIES $26,110 $23,780 INCOME STATEMENT FOR THE YEAR 2013 AND 2O14 2013 2014 Amount Amount Service Revenue (A) $8,700 $9,400 Less : Expenses Depreciation Expenses $2,000 $2,000 Cost of Goods Sold $2,200 $2,600 Other Expenses for the year $820 $350 Interest Expenses $750 $780 Total Expenses (B) $5,770 $5,730 Net Revenue (A-B) $2,930 $3,670 Less : Tax Rate @ 30% = $879 $1,101 Net income after Tax $2,051 $2,569 Less : Dividend Expenses $1,630 $1,700 Balance carry Forward to Retained Earning $421 $869 NOTE: 1 - CALCULATION OF THE RETAINED EARNING Retained Earning for the year 2013 $421 Add: Profit of the year $2,569 Less: Dividend Paid $1,700 Net Balance in Retained Earning $1,290 Answer = b: Calculation of Total Equity Total Assets as on 2013 = $26,110 Less: Account Payable $4,870 Short Term Note Payable $720 Long Term Debt $19,350 Retained Earnings $421 Total Equity for the year 2013 = $749 As per the above total equity for the year 2012 = $749