Question

Given the following information please construct a balance sheet and an income statement for the company. It provides software via a cloud subscription. There is no inventory All information in $000 5,374 908 651 925 Total Revenues Cash Common Stock Cost of Revenues Subscription Interest Expense Additional Paid in Capital Retained Earnings Cost of Revenues Professional Services Gross Margin Short term securities Long term debt Accounts Receivable Accounts Pavable Research & Development Marketing & Sales Other current liabilities Other current assets Investment income General & Administrative Expense Depreciation Property & Equipment Goodwill Other long term assets Total Current Assets Total Operating Income Net Loss Total assets 3,954 (630) 365 4,084 87 2,328 1,906 1,103 793 2,757 3,287 649 10 680 448 1,126 3,783 2,234 3,550 (146) (600) 10,693

Answer 1

Solution:
Income Statement:

Particulars	Amount ($000)	Amount ($000)
Revenue:
Total Revenue		5,374
Less: Cost of Revenues Subscription		(925)
Less: Cost of Revenues Professional Services		(365)
Gross Profit (A)		4,084
Operating Expenses:
General & Administrative Expenses	680
Interest Expense	16
Depreciation Expense	448
Total Operating Expenses (B)		1,144
Selling Expenses:
Research & Development	793
Marketing & Sales	2,757
Total Operating Expenses (C)		3,550
Operating Income D= (A-B-C)		(610)
Other Incomes and Expenses:
Investment Income	10
Other expenses	0
Net Other Incomes and Expenses (E)		10
Net Income Before Tax F=(D-E)		(600)
Less: Income Taxes		0
Net Income G		(600)

Balance Sheet

Liabilities	Amount ($)	Assets	Amount ($)
Current Liabilities:		Current Assets:
Accounts Payable	1,103	Cash	98
Short-term loans	-	Accounts Receivable	1,906
Other current liabilities	3,287	Inventory	-
Total current liabilities	4,390	Short-term Securities	87
Long-term Liabilities:		Other Current Assets	649
Long-term debt	2,328	Total Current Assets	3,550
Bonds	-	Fixed (Long-term)Assets:
Total Long term Liabilities	2,328	Property & Equipment	1,126
Owner's Equity:		Goodwill	3,783
Common Stock	651	Other long term assets	2,234
Additional Paid in Capital	3,954	Equipment	-
Retained Earnings	(630)	Total fixed Assets	7,143
Total owner's equity	3,975
Total Liabilities and Owners Equity	10,693	Total Assets	10,693