Question

QUIZ (MUST BE TYPED)

With the information given below, construct Pedro Inc.’s Balance Sheet, Income Statement and Retained Earnings Statement for 2016 (NO PREFERRED STOCK).

(In 000’s)

December 31, 2016

Cash                                                    $          ?

Notes Payable                                     500,000

Sales                                                   10,000,000

Accounts Receivable                          850,000

Accounts Payable                               1,200,000

Long-term Debt                                  18,000,000

Common Stock (10,000 shares)         10,000

Additional Capital                              4,990,000

Retained Earnings (2015)                 5,050,000

Gross Fixed Assets                             32,350,000

Cost of Goods Sold                            4,000,000

Other Operating Expenses                 1,450,000

Inventory                                            1,980,000

Interest Expense                                 2,500,000

Tax Rate 50%

Depreciation Expense                        50,000

Accumulated Depreciation                6,050,000

Dividends                                           5,000

Pedro’s

INCOME STATEMENT

2016 (in 000’s)

Pedro’s

STATEMENT OF RETAINED EARNINGS

2016 (in 000’s)

Pedro’s

BALANCE SHEET

2016 (in 000’s)

Cash & MS                             $___________            Accounts Payable       $___________

Accounts Receivable             

Answer 1

The income statement is as below:

Particulars	Amount ($)
Sales	1,00,00,000
Less: Cost of goods sold	40,00,000
Gross Profit	60,00,000
Less: Other operating expenses	14,50,000
: Interest expense	25,00,000
: Depreciation expense	50,000
Income before tax	20,00,000
Less: Tax @50%	10,00,000
Net Income	10,00,000

The statement of retained earnings is below:

Particulars	Amount ($)
Retained earnings (2015)	50,50,000
Add: Net Income	10,00,000
Less: Dividend	5,000
Retained earnings (2016)	60,45,000

The balance sheet is presented below:

Liabilities	Amount ($)	Amount ($)	Assets	Amount ($)	Amount ($)
Stockholders' equity:			Gross Fixed Assets	3,23,50,000
Common stock	10,000		Less: Accumulated depreciation	60,50,000
Additional capital	49,90,000		Net fixed assets		2,63,00,000
Retained earnings	60,45,000
Stockholders' equity		1,10,45,000	Accounts receivable		8,50,000
Long term debt		1,80,00,000	Inventory		19,80,000
Notes payable		5,00,000
Accounts payable		12,00,000	Cash		16,15,000
Total liabilities		3,07,45,000	Total Assets		3,07,45,000

The cash balance is $1615000