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Q No.1 FINANCE FOR MANAGERS Q No.1 Following Trial balance and adjustment data is presented by Saleem , a sole- trader at the end of its financial year Dec.31,2012. CREDIT DEBIT 105,000 20,000 132.800 3,000 6,000 2,000 1.000 500 7,000 25,100 200 TITLE OF ACCOUNT CASH A/C RECEIVABLE EQUIPMENT ADVERTISING EXPENSE PREPAID RENT MISCELLANEOUS EXPENSE OFFICE SUPPLIES EXPENSE INTEREST EXPENSE MDS. INVENTORY COST OF GOODS SOLD CARRIAGE OUTWARD SALES RETURN SALARIES EXPENSE SALES REVENUE COMMISSION UNEARNED INTEREST INOCME COMMISSION INCOME A/C PAYABLE CAPITAL-SALEEM NOTE PAYABEL BANK OVERDRAFT LONG-TERM LOAN TOTAL 900 8,000 240,000 800 400 2,500 5,500 39,800 5,000 7,500 10,000 311,500 311,500 ADJUSTMENT DATA ON DEC.31,2002: Depreciation on equipment 2% Tax rate is applied 20% • INSTRUCTION 1. MULTIPLE STEP INCOME STATEMENT showing EBIT and EAT 2. BALANCE SHEET in classified form.

Answer 1

Saleem
Income Statement for Dec 31, 2012
sales revenue	240000
less:sales return	-900
net sales revenue		239100
commission income		2500
total revenue		241600
cost of goods sold		-25100
gross profit		216500
less:operating expenses:
salaries expense	8000
advertising expenses	3000
miscellaneous expenses	2000
office supplies expenses	1000
carriage outward	200
depreciation	2656
total operating expenses		-16856
EBIT		199644
less:interest expenses		-500
add:interest income		400
EBT		199544
less:tax (20%)		-39909
EAT		159635

Saleem
Balance Sheet as of Dec 31, 2012
Liabilities	Amount	Assets		Amount
current liabilities		current assets
a/c payable	5500	cash		105000
bank over draft	7500	a/c receivable		20000
notes payable	5000	invenotry		7000
tax payable	39909	prepaid rent		6000
commission unearned	800	total current assets		138000
total current liabilities	58709	equipment	132800
long term loan	10000	dep	-2656	130144
total liabilities	68709
stockholders equity
capital	39800
profit	159635
total liabilities and stockholders equity	268144	total assets		268144