BUS 1050 Foundation of business

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Balance Sheet

CLASSIC CEREALS INC.
Balance Sheet
Assets
Current Assets $
Cash 15,000
Accounts receivable 200,000
Notes receivable 50,000
Inventory 335,000
Total Current Assets $ 600,000
Fixed assets
Land 40,000
Buildings and improvements 200,000
Equipment and vehicles 120,000
Furniture and fixtures 26,000
Less: Accumulated depreciation (180,000)
Total fixed assets $ 206,000
Other assets
Goodwill 20,000
Research and development 80,000
Total other assets $ 100,000
Total assets $ 906,000
Liabilities
Current Liabilities
Accounts payable 40,000
Notes payable 8,000
Accrued taxes 150,000
Accrued salaries 15,000
Pension fund 75,000
Total current liabilities $ 288,000
Long-term liabilities
Notes payable 35,000
Bonds 290,000
Total Long -term liabilities $ 325,000
Owner's Equity
Common stock 100,000
Retained earnings 193,000
Total owner's equity $ 293,000
Total liabilities and owner's equity $ 906,000

Income Statement

CLASSIC CEREALS INC.
Income Statement
Revenues
Gross Sales 720,000
Less: Sales returns and allowances 12,000
sales discounts 8,000 20,000
Net sales $ 700,000
Cost of Goods Sold
Beginning inventory, Jan. 1 200,000
Merchandise purchases 400,000
Freight 40,000 440,000
Cost of goods available for sale 640,000
Less ending inventory, Dec. 31 230,000
Cost of goods sold $ 410,000
Gross Profit (Gross margin) $ 290,000
Operating Expenses
Selling expenses
Salaries for salespeople 90,000
Advertising 15,000
Supplies 2,000
Other sales expenses 3,000
Total selling expenses $ 110,000
General expenses
Office salaries 67,000
Depreciation 1,500
Insurance 1,500
Rent 28,000
Light, heat, power 12,000
Miscellaneous expenses 2,000
Total General Expenses $ 112,000
Total operating expenses $ 222,000
Net profit (Income) from operations $ 68,000
Other expenses 10,000
$ 10,000
Net Income before taxes $ 58,000
Less: Income Tax expense $ 14,500
Net income (profit) after taxes $ 43,500