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29 Apr 2019

Given the following income statment , determine the orgnization operating cash flow for the period

INCOME STATEMENT FOR YEAR ENDING 20XX

SALES

$4,500,000

COST OF GOODS SOLD

$3,400,000
 

$1,100,000

EXPENSES

200,000

DEPRECIATION

400,000

PROFIT BEFORE TAX

$500,000

TAX

$300,000

PROFIT AFTER TAX

$200,000

DIVIDENDS

50,000

RETAINED EARNING

$150,000

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Related questions


Marion has just received the year-end financial statements shown below. Evaluate the state of her company from the perspective of shareholders. What should Marion conclude based on this, and what possible actions can be recommended?
Marion's, Inc.
Income Statement 2012 Cash Flow Statement
Revenue $3,906,000 Balance Forward $212,500
Returns, Credits, etc. ($1,400) Net Income $124,480
Net Sales (Revenue) $3,904,600 Depreciation $75,000
Direct Costs Change in Working Capital ($17,140)
Labor ($1,450,000) Capital Expenditures ($70,000)
Materials ($989,000) Financial Activities ($75,000)
Cost of Goods Sold (COGS) ($2,439,000) Net change in cash $37,340
Gross Margin $1,465,600 Ending Cash Balance $249,840
Selling General and Admin.
Marketing ($400,000)
Research and Development ($350,000)
Administration ($250,000)
Other ($200,000)
Depreciation ($75,000)
S G & A ($1,275,000)
Earnings Before Interest and Taxes (EBIT) $190,600
Interest Expense/Income ($35,000)
Pre-tax Income $155,600
Income Tax @ 20% ($31,120)
Net Income $124,480
Balance Sheets, 2011
Assets Liabilities
Current Assets Current Liabilities
Cash $249,840 Accounts Payable $125,000
Accounts receivable $60,160 Taxes Payable $10,000
Finished Goods Inventory $40,000 Total Current Liabilities $135,000
Materials Inventory $85,000 Long Term Liabilities
Total Current Assets $435,000 Bank Loans @ 6% $125,000
Mortgage @ 4.5% $460,000
Long term Assets Total Long Term Liabilities $585,000
Buildings $1,050,000
Equipment and machines $80,000 Capital Stock $650,000
Other $100,000 Retained Earnings $295,000
Total Fixed Assets $1,230,000 Stockholders Equity $945,000
Total Assets $1,665,000 Total Liabilities and Stockholders equity $1,665,000
Current Stock Price $44.25
Current Outstanding Shares 5,000

CP6-4 Preparing a Multistep Income Statement with Sales Discounts and Sales Returns and Allowances and Computing the Gross Profit Percentage [LO 6-5]

[The following information applies to the questions displayed below.]

Psymon Company, Inc. sells construction equipment. The annual fiscal period ends on December 31. The following adjusted trial balance was created from the general ledger accounts on December 31:

Account Titles

Debits

Credits

Cash

$

59,810

        

Accounts Receivable

  

24,800

        

Inventory

  

90,500

        

Property and Equipment

  

67,000

        

Accumulated Depreciation

      

$

28,100

  

Liabilities

        

41,900

  

Common Stock

        

124,000

  

Retained Earnings, January 1

        

15,000

  

Sales Revenue

        

258,500

  

Sales Returns and Allowances

  

8,700

        

Sales Discounts

  

11,400

        

Cost of Goods Sold

  

138,800

        

Salaries and Wages Expense

  

23,800

        

Office Expense

  

24,800

        

Interest Expenses

  

3,700

        

Income Tax Expense

  

14,190

        
             

Totals

$

467,500

  

$

467,500

  
             
 

Required:

1.

Prepare a multistep income statement that would be used for internal reporting purposes. Treat Sales Discounts and Sales Returns and Allowances as contra-revenue accounts. TIP: Some of the accounts listed will appear on the balance sheet rather than the income statement.

2.

Prepare a multistep income statement that would be used for external reporting purposes, beginning with the amount for Net Sales.

1. Provide a brief description of a business (you can make it up), including the name of your business and the industry in which you operate. Be sure to identify and explain a product that you will manufacture. ( i do not need assistance with this part, I have chosen to be a table manufacturing company). (ie. 4 legs, flat top, made of wood).

2. Calculate the cost to manufacture this product on a per unit basis considering the cost factors of material, labor, and manufacturing overhead. This calculation will form the basis of the cost of goods sold amount.

3. Determine the expected selling price of this product based on market research or based on a required gross profit.

4. Determine the number of operating expenses, and selling and administrative expenses that will be required each month to operate your business. (These expenses could all be considered cash basis).

Section 2

1. Based on the information developed in Section 1 prepare a Sales Budget differentiating between cash and credit sales for each month of operations starting January 1, 2016, the first month of operation, to the end of the first quarter ended March 31, 2016. You should state the collection period for credit sales. Usually, a company's collection period is 30 days, however, you may wish to do some research on your industry to see what the average collection period is of similar companies.

2. Based on the forecasted sales budget in #1, prepare an Inventory Purchases Budget for each monthly period and set a target for the ending inventory at each month-end. You should state the payment period that is expected. Prepare a Cash Budget for each month based on the Sales and Inventory Budgets and the estimated operating expenses each month.

Section 3

1. Based on the Budgets prepared in Section 2 prepare a Pro Forma Income Statement, Pro Forma Balance Sheet, and Pro Forma Statement of Cash Flows for the quarter ended March 31, 2016.

2. Explain how your company would make use of these Pro Forma Financial Statements for business purposes and decision making.

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