Chp. 2 - FIN 301 - CHAPTER2 CASHFLOWSANDFINANCIAL...

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CHAPTER 2 CASH FLOWS AND FINANCIAL STATEMENTS AT SUNSET BOARDS Below are the financial statements that you are asked to prepare. 1. The income statement for each year will look like this: Income statement 2007 2008 Sales $190,199 $231,840 Cost of goods sold 96,952 122,418 19,067 24,886 Depreciation 27,370 30,936 EBIT $46,810 $53,600 Interest 5,950 6,820 EBT $40,860 $46,780 Taxes 8,172 9,356 Net income $32,688 $37,424 Dividends $16,344 $18,712 Addition to retained earnings 16,344 18,712 2. The balance sheet for each year will be: Balance sheet as of Dec. 31, 2007 Cash $13,990 Accounts payable $24,725 Accounts receivable 9,913 Notes payable 11,270 Inventory 20,861 Current liabilities $35,995 Current assets $44,764 Long-term debt $60,950 Net fixed assets $120,750 Owners' equity 68,569 Total assets $165,514 Total liab. & equity $165,514 In the first year, equity is not given. Therefore, we must calculate equity as a plug variable. Since Equity = $165,514 – 35,995 – 60,950 Equity = $68,569
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This note was uploaded on 02/13/2009 for the course FIN 301 taught by Professor Donaldshimmin during the Fall '08 term at University of Dayton.

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Chp. 2 - FIN 301 - CHAPTER2 CASHFLOWSANDFINANCIAL...

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