Question

30 x My Cou X My Cou My Cow Vitaso x M Omail X M Inbox My Dry X Untit 1-a42e7851a5235b7882aa5b0e1dbd3937061c08e/MyFiles/Downloads/FIN330220GHANZO Chapter 202%20(2).pdf FIN3301 Week 2 Name Date: 1. Building a Balance Sheet. ABCO, Inc. has current assets of $15,200, net fixed assets of $4,900, current liabilities of $6,600, and long-term debt of $10,000. What is the value of the shareholder's equity? How much is net working capital? Show your Balance Sheet. 2. Building an Income Statement. Billy's Exerminators, Inc. has sales of $900,000, costs of $303,000, depreciation expense of $50,000, interest expense of $38,000, and a tax rate of 35%. What is the net income? Show your Income Statement 3. Calculating Taxes. The Drydel Co. had $307,000 in taxable income. Using the tax rates from Table 2.3 (Pg 30), calculate the company's income taxes. Show your computation

Answer 1

1]	BALANCE SHEET
	Assets
	Current assets	$           15,200
	Net fixed assets	$             4,900
	Total assets	$           20,100
	Total liabilities and Stockholders' Equity
	Current liabilities	$             6,600
	Long term debt	$           10,000
	Total liabilities	$           16,600
	Stockholder's equity [20100-16600]	$             3,500
	Total liabilities and Stockholders' Equity	$           20,100
	ANSWERS:
	Stockholder's equity	$             3,500
	Net working capital = Current assets-Current liabilities = 15200-6600 =	$             8,600
2]
	INCOME STATEMENT
	Sales		$    9,00,000
	Operating expenses:
	Costs	$       3,03,000
	Depreciation	$          50,000
	Total operating expenses		$    3,53,000
	Net operating income		$    5,47,000
	Interest expense		$       38,000
	Income before taxes		$    5,09,000
	Taxes at 35%		$    1,78,150
	Net income		$    3,30,850
3]	Tax rates not given.