Question

2. Use the information below to prepare an Income Statement and Balance Sheet for 2011 & 2012. Also include a 40% tax rate expense on your pretax income.

	2011	2012
Sales	$4,203	$4,507
Cost of Goods Sold	2,422	2,633
Depreciation	785	952
Interest	180	196
Dividends	225	250
Current Assets	2,205	2,429
Net fixed Assets	7,344	7,650
Current Liabilities	1,003	1,255
Long-Term debt	3,106	2,085

Answer 1

- Preparing the Income Statement for 2011 & 2012:-

Particular	2011	2012
Sales	4,203	4,507
COGS	(2,422)	(2,633)
Gross Profit	1,781	1,874
Depreciation	(785)	(952)
EBIT	996	922
interest	(180)	(196)
Taxable Income	816	726
Taxation (40%)	(326)	(290)
Net income	490	436
Common Dividend	225	250
Additions to RE	265	186

- Preparing the Balance Sheet for 2011 & 2012 :-

ASSETS	2011	2012	LIABILITIES	2011	2012
Current Assets	2,205.00	2429	Current Liabilities	1,003.00	1255
Net Fixed Assets	7,344.00	7650	Long-Term Debt	3,106.00	2085
			Total Owner's equity (Bal. Fig)	5,440.00	6,739.00
TOTAL ASSETS	9,549.00	10,079.00	TOTAL LIABILITIES AND OWNER"S EQUITY	9,549.00	10,079.00

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