Provided below is the incomplete income statement (for 2020) and balance sheet (Dec 31 2019 and...

Provided below is the incomplete income statement (for 2020) and balance sheet (Dec 31 2019 and Dec 31 2020) for SCOTTY Inc. SCOTTY Inc. Income Statement For the year ended Dec. 21, 2020 Net sales $8,953 Cost of goods sold $5,865 Depreciation $? EBIT $? Interest paid $675 Earnings before taxes $? Taxes $400 Net income $705 Dividends paid $? Addition to retained earnings $450 SCOTTY Inc. Balance Sheet as at December 31, 2019 and 2020 2019 2020 2019 2020 Cash $725 $1,135 Accounts payable $859 $1,031 Accounts rec. $2,330 $? Notes payable $? $4,020 Inventory $3,240 $5,202 Current liabilities $? $? Current assets $? $? Long-term debt $9,250 $9,750 Net fixed assets $? $9,211 Common stock $250 $? Retained earnings $? $2,797 Total assets $16,083 $17,848 Total liabilities & equity $? $? a) Fill in the missing values for entries in the income statement and balance sheet in the table provided below. MISSING ENTERIES VALUES Depreciation EBIT Earnings before taxes Dividends paid Current assets (2019) Net fixed assets (2019) Notes payable (2019) Current Liabilities (2019) Retained earnings (2019) Total liabilities & equity (2019) Accounts receivables (2020) Current assets (2020) Current Liabilities (2020) Common stock (2020) Total liabilities & equity (2020) b) What is the company’s net working capital at the end of 2019 and at the end of 2020?

Solutions

Expert Solution


	INCOME STATEMENT
A	Net sales	$8,953
B	Cost of goods sold	$5,865
C=A-B	Gross Profit	$3,088
X=C-Y	Depreciation	$1,308
Y=D+Z	EBIT	$1,780
D	Interest paid	$675
Z=E+F	Earnings before taxes	$1,105
E	Taxes	$400
F	Net income	$705
W=F-G	Dividend paid	$255
G	Addition to retained Earnings	$450
	Retained Earnings in 2019=2797-450=	$2,347

	BALANCE SHEET
		2019	2020
a	Cash	$725	$1,135
b	Accounts receivable	$2,330	$2,300
c	Inventory	$3,240	$5,202
d=a+b+c	Current Assets	$6,295	$8,637
e	Net fixed assets	$9,788	$9,211
f=d+e	Total assets	$16,083	$17,848
g	Accounts payable	$859	$1,031
h	Notes payable	$3,377	$4,020
i=g+h	Current Liabilites	$4,236	$5,051
j	Long-term debt	$9,250	$9,750
k	Common stock	$250	$250
l	Retained earnings	$2,347	$2,797
m=f=i+j+k+l	Total liabilities & equity	$16,083	$17,848

X=d-i	Net Working Capital=Current Assets-Current Liabilities	$2,059	$3,586

jeff jeffy answered 1 year ago

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