1. Preparing Income statement for 2010 and 2011:-
Particular | 2010 (Amount in $) | 2011 (Amount in $) |
Sales | 321,437 | 391,810 |
Less: COGS | (163,849) | (206,886) |
Gross Profit | 157,588 | 184,924 |
Less: Selling & Admin Exp | (32,223) | (42,058) |
Less: Depreciation | (46,255) | (52,282) |
Earning Before Interest and Taxes(EBIT) | 79,110 | 90,584 |
Less: Interest Expenses | (10,056) | (11,526) |
Earning before Tax(EBT) | 69,054 | 79058 |
Less: Tax@20% | (13,811) | (15,812) |
Net Income | 55,243 | 63,246 |
Dividends Paid | 27622 | 31,623 |
Transfer to Retained earnings | 27621 | 31,623 |
b). Preparing the Balance Sheet for 2010 & 2011:
Particular | 2010 (Amount in $) | 2011 (Amount in $) |
ASSETS | ||
Cash | 23,643 | 35,721 |
Accounts Receivables | 16,753 | 21,732 |
Inventory | 32,255 | 43,381 |
Net Fixed Assets | 204,068 | 248,625 |
Total assets | 276,719 | 349,459 |
LIABILITIES & EQUITIES | ||
Accounts Payable | 41,786 | 47,325 |
Notes Payable | 19,046 | 20,796 |
Long Term Debt | 103,006 | 116,334 |
Equity (Balancing Fig for 2010) | 85,260 | 105760* |
Retained Earnings | 27,621 | 59,244** |
Total Liabilities & Equities | 276,719 | 349,459 |
*- Equity for 2011 = 85260+20500 ;= $ 105760
** Retained earnings for 2011 = 27,621+31,623 ;= $59,244
c). Preparing Operating Cash flow for 2010 & 2011:-
Particular | 2010 (Amount in $) | 2011 (Amount in $) |
Net Income | 55,243 | 63,246 |
Add: Depreciation | 46255 | 52282 |
Add: Increase in Accounts Payable | 41,786 | 5539 |
Add: Increase in Notes Payable | 19,046 | 1750 |
Less: Increase in Accounts Receivables | (16,753) | (4979) |
Less: Increase in Inventory | (32,255) | (11126) |
Operating Cash Flow | 113322 | 106712 |
Note- Since, 2010 is initial year Change in working capital from 0.
d). Preparing Cash Flow from Assets for 2011:-
Cash Flow from Assets = Operating Cash Flow - Capital Expenditure
= 31,623 - 96839*
= -$ 65,216
*- Capital Expenditure = Closing Fixed assets - Opening Fixed Assets + Depreciation
= 248625 - 204068 + 52282
= $ 96,839
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