12.Refer to the information regarding Tessco Technologies. Assume Tessco management wishes to know the financial statement impact of certain transactions. On 3/30/18, Tessco borrows $10,000 cash from a bank and immediately uses the cash to purchase plant and equipment costing $10,000. The interest rate on the loan is 10 percent with interest payable annually on March 30 beginning March 30, 2019. If a new balance sheet is prepared immediately after these transactions, it will show:
Total liabilities equal to: $______________________________.
Total shareholders’ equity to: $_________________________.
Tessco Technologies – Statement of Income |
|
For the Fiscal Year Ended |
March 29, 2018 |
Revenues |
$131,658 |
Cost of goods sold |
95,859 |
Gross profit |
35,799 |
Selling, general and administrative expenses |
29,662 |
Income from operations |
6,137 |
Interest income (expense), net |
(713) |
Income before provision for income taxes |
5,424 |
Provision for income taxes |
2,049 |
Net income |
$3,375 |
Tessco Technologies – Balance Sheet |
|
As of |
March 29, 2018 |
ASSETS: |
|
CURRENT ASSETS: |
|
Cash and marketable securities |
$4,459 |
Trade accounts receivable |
15,757 |
Product inventory |
18,872 |
Deferred tax asset |
524 |
Prepaid expenses and other current assets |
1,609 |
Total current assets |
41,221 |
PROPERTY AND EQUIPMENT: |
|
Land |
2,186 |
Building and improvements |
8,577 |
Information technology equipment and software |
3,714 |
Equipment and furniture |
4,821 |
Tooling |
340 |
Less-accumulated depreciation and amortization |
4,883 |
Property and equipment, net |
14,755 |
GOODWIILL |
3,950 |
TOTAL ASSETS: |
$59,926 |
LIABILITIES: |
|
CURRENT LIABILITIES: |
|
Trade accounts payable |
$16,394 |
Accrued expenses and other current liabilities |
2,363 |
Current portion of long-term debt |
294 |
Total current liabilities |
19,051 |
DEFERRED TAX LIABILITY |
42 |
LONG-TERM DEBT, net of current portion |
7,441 |
TOTAL LIABILITIES |
26,534 |
SHAREHOLDERS’ EQUITY: |
|
Common stock, $0.01 par value, |
|
4,343,608 shares outstanding as of March 28, 1997 |
47 |
Additional paid-in capital |
20,242 |
Treasury stock, at cost, 261,572 shares |
(2,844) |
Retained earnings |
15,947 |
TOTAL SHAREHOLDERS' EQUITY |
33,392 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
$59,926 |
The total liabilities will be equal to $ 36,534 (26,534+10,000)
The total shareholder's equity will be $ 33,392.
Important notes:
1. The loan amount from bank will increase the total liability amount.
2. Interest are loa are just started from the day, so it is not part of the account.
3. There are no change in the shareholder's equity amount.. It remains same.
12.Refer to the information regarding Tessco Technologies. Assume Tessco management wishes to know the financial statement...
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