The Specific Electric Company (SE) is finishing its first year of existence and is applying for an additional loan in

The Specific Electric Company (SE)   is finishing its first year of existence and is applying for an additional loan in anticipation of expansion in 2013.  The bank has asked for an Income statement and Cash Flow statement for OSE's first year.  A temporary worker was hired to go through all invoices and checks and gathered the following data.  

               Items                2012

Accounts Payable         $0 

Accounts Receivable           $0 

Capital Equipment (depreciable)$630,000 

Equipment rent/lease payments$28,000 

Hourly wages                 $980,000 

Interest paid                    $40,000 

Loan Received in 2012$500,000 

Marketing Web site          $170,000 

Miscellaneous expenses$624,000 

Permanent Staff Salaries$1,800,000 

Rent                                  $137,000 

Sales                        $4,000,000 

a.  Prepare a 2012 income statement  that includes totals for COGS, SG&A, EBIT, Pre-tax Income and Net Income.  Use a tax rate of 20% and compute depreciation using straight line over three years.

b.  Prepare a 2012 cash flow statement