Question

a) Use the following information for Company COLTIB to create the Balance Sheet and the Income Statement for 2017 and 2018, Tax rate is 30% for both 2017 and 2018. In 2017, depreciation was 500 2018 2,400 3,000 1,000 200 10% of the Long-term Debt as of the end of the year 800 310 317 2,000 8,000 300 640 2017 2,000 2,500 800 100 Sales for the year Accumulated Depreciation as of Dec 31st Cost of Goods Sold for the Other Expenses for the year Interest for the year Cash as of Dec 31st Accounts Receivable as of Dec 31st Short-term Notes Payable as of Dec 31st Long-term Debt as of Dec 31st Total Gross Fixed Assets as of Dec 31st Accounts Payable as of Dec 31st Inventory as of Dec 31 st Dividends for the vear Accumulated Retained Earnings 300 250 450 1,800 8,000 500 600 One third of the Net Income You should find it, given that this is the only account under Equity! b) Company X has not issued or bought back new stock for the last five years. Calculate total equity for 2016 c) How does the Sales and Total Assets change from 2017 to 18? Do you see this as a positive or a negative change vis-à-vis company's financial health?

Answer 1

a)Income Statement
	2017	2018
Sales	2000	2400
Less: Cost of Goods Sold	800	1000
Gross Profit	1200	1400
Less: Expenses:
interest	180	200
Depreciation	500	500
Other exp.	100	200
Total Expenses	780	900
IBT	420	500
Less: Tax 0.30	126	150
Net Income	294	350
Less:Dividend	98	117
Inc. tfr to RE	196	233
Balance Sheet:
Assets:	2017	2018
Cash	300	800
AR	250	310
Inventory	600	640
Current Assets	1150	1750
Fixed Assets	8000	8000
Less:Acc. Dep.	-2500	-3000
Total Assets:	6650	6750
Liabilities and Capital:	2017	2018
AP	500	300
STNP	450	317
Current Liabilities	950	617
LTNP	1800	2000
Acc. RE (Open Bal.)	3704	3900
Add:Inc. tfr	196	233
Acc. RE (Close Bal.)	3900	4133
Total Liabilities & Capital	6650	6750
b) Total equity for 2016 ending is $3704.
c) Sales has grown 20% from year 2017 to 2018. (400/2000)
Total assets has grown around 1.50% during the same period.
The growth pattern of the company is positive as
both the sales and total assets has shown a growth
pattern. (100/6650)