Question

Using the following financial information, create an income statement reflecting business activity during the year, and a balance sheet reflecting the firm's end-of-year financial position. Financial Information All values are end-of-year unless otherwise stated Accounts Payable 12,000 Accounts Receivable 10,000 Accruals 10,000 Accumulated Depreciation 100,000 Beginning-of-year Inventory 50,000 Beginning-of-year Retained Earnings 120,000 Cash 7,000 Common Stock 121,500 Cost of Goods Sold 200,000 Current Portion of Long Term Debt 1,500 Depreciation Expense 25,000 Dividends 40,000 Gross Property, Plant, and Equipment 400,000 Interest Expense 15,000 Long Term Debt (excluding current portion) 120,000 Net Sales 400,000 Operating Expenses (excluding depreciation) 40,000 Purchases 250,000 Tax rate 40%

Answer 1

Income Statement
For the Years Ending.......
Revenue	Amount
Sales revenue	4,00,000
Total Revenues(EBITDA)	4,00,000
Expenses
Operating Expenses	40,000
Cost of goods sold	2,00,000
Depreciation	25,000
Interest expense	15,000
Total Expenses	2,80,000
Net Income Before Taxes(EBT)	1,20,000
Income tax expense	48,000
Income from Continuing Operations(EAT)	72,000
{42}
Net Income	72,000
Appropriations
Dividends	40000
Transfer to Retained Earnings)	32,000

BaalnceSheeet for the period ended....
Eqities and Liabilities	Amount	Assets	Details	Amount
Common Stock	121500	Accounts Receivable		10000
Retained Earnings(120,000+32000)	152000	Gross Property Plant and Equipment	4,00,000
Accounts Payable	12000	Less:Accumulated Depreciation	(100000)	300000
Long Term Debt(120,000+1500)	121500
Accruals	10000	Closing Stock		1,00,000
		Cash		7000
	417000			417000

*Assumning Dividend and Taxs are already adjusted in the given accounts ( that is they have been paid already)

As we Know COGS= Opening Stock+ Net Purchases - Closing Stock
Hence, 200,000=50,000 + 250,000 - Closing Stock
So, Closing Stock= 100,000