| | Smith Jones & Sacher Ltd. |
| | Income sratement fot the year ended December 31, 2020 | | | | | 2021 |
| | Sales | $ 1,708,000 |
| | Cost of the sales | $ 1,020,000 | | | | Month | Sales | Cost of the sales (salaries) | Cost of the sales (Hotels, transports…) | Sales & MKT | Admin Salaries | Depreciation over "old" assets | | | On March 31st, 2021 the company purchased 2 new vehicles for a total amount of 80.000$. The company paid cash. The |
| | Gross profit | $ 688,000 | | | | 1 | $ 155,000 | $ 100,000 | $ 12,000 | $ 12,000 | $ 12,500 | $ 30,000 | | | estimated useful life of said vehicles is 5 years, no salvage value. |
| | Depreciation | $ 120,000 | | | | 2 | $ 162,000 | $ 100,000 | $ 13,000 | $ 9,500 | $ 12,500 | $ 30,000 |
| | Sales and marketing | $ 85,000 | | | | 3 | $ 197,000 | $ 150,000 | $ 14,000 | $ 10,500 | $ 12,500 | $ 30,000 | | | The company uses the straight line method for depreciation purposes. Also the half-year convention is applied. |
| | Administration | $ 150,000 | | | | 4 | $ 208,000 | $ 150,000 | $ 11,000 | $ 11,000 | $ 12,500 | $ 30,000 |
| | Total fixed cost | $ 355,000 | | | | 5 | $ 210,000 | $ 160,000 | $ 8,000 | $ 9,000 | $ 12,500 | $ 30,000 | | | All the sales and purchases of the company are made on account at 30 days. |
| | Operating income | $ 333,000 | | | | 6 | $ 220,000 | $ 160,000 | $ 14,000 | $ 12,000 | $ 12,500 | $ 30,000 |
| | Earnings before taxes | $ 333,000 | | | | 7 | $ 230,000 | $ 160,000 | $ 5,000 | $ 7,000 | $ 12,500 | $ 30,000 | | | The note payable was contracted on December 31, 2020 and bears 5% interests to be paid as a lump sum at maturity, in June 15, 2022. |
| | Taxes | $ 83,250 | | | | 8 | $ 176,000 | $ 160,000 | $ 4,000 | $ 7,000 | $ 12,500 | $ 30,000 |
| | Net result | $ 249,750 | | | | 9 | $ 235,000 | $ 160,000 | $ 17,000 | $ 14,000 | $ 12,500 | $ 30,000 | | | Salaries are paid the 5th day of each month |
| | | | | | | 10 | $ 242,000 | $ 160,000 | $ 12,000 | $ 12,000 | $ 12,500 | $ 30,000 | | | Taxes (25% rate) are paid at the end of June. |
| | | | | | | 11 | $ 243,000 | $ 170,000 | $ 11,000 | $ 13,000 | $ 12,500 | $ 30,000 | | | On 1st of April 2021, the company declares a $120.000 dividend payable on 1st of August |
| | Balance Sheet | | | | | 12 | $ 240,000 | $ 170,000 | $ 8,000 | $ 12,000 | $ 12,500 | $ 30,000 |
| | Assets | $ 2,583,000 | | | | TOTAL | $ 2,518,000 | $ 1,800,000 | $ 129,000 | $ 129,000 | $ 150,000 | $ 360,000 |
| | Fixed assets | $ 2,200,000 |
| | Accounts receivable | $ 220,000 |
| | Cash | $ 163,000 |
| | Liabilities | $ 583,000 | | | | OLD Balance Sheet Dec 31, 2021 | | | Depreciation Schedule |
| | Notes payable | $ 379,750 | | | | Assets | $ 2,583,000.00 | | Year | Depreciation expense | Accumulated depreciation | Net book value |
| | Accounts payable | $ 120,000 | | | | Fixed assets | $ 2,280,000.00 | | 1 | $ 8,000 | $ 8,000 | $ 72,000 |
| | Income tax payable | $ 83,250 | | | | Accounts depreciation | $ (24,000.00) | | 2 | $ 16,000 | $ 24,000 | $ 56,000 |
| | | | | | | Accounts receivable | $ 240,000.00 | | 3 | $ 16,000 | $ 40,000 | $ 40,000 |
| | Stockholders equity | $ 2,000,000 | | | | Cash | $ 3,366,000.00 | | 4 | $ 16,000 | $ 56,000 | $ 24,000 |
| | Common stock | $ 2,000,000 | | | | | | | 5 | $ 16,000 | $ 72,000 | $ 8,000 |
| | | | | | | Liabilities | $ 582,250.00 | | 6 | $ 8,000 | $ 80,000 | $ - 0 |
| | | | | | | Notes payable | $ 379,750.00 |
| | | | | | | Accounts payable | $ 20,000.00 |
| | | | | | | Salaries payable | $ 182,500.00 | | We calculate the depreciation by dividing $80,000/5 |
| | | | | | | | | | Then, to calculate with half-year convention we divide it once more with 2 for the first year |
| | | | | | | Stockholders equity | $ 5,279,750.00 |
| | | | | | | Common stock | $ 2,000,000.00 |
| | | | | | | Retained earnings | $ 3,279,750.00 |
| | | | | | | | | | Balance Sheet Dec 31, 2021 |
| | | | | | | | | | Assets | $ 2,020,263 | | | | OLD - Statement of cash flow Year ended December 31, 2021 |
| | | | | | | | | | Fixed assets | $ 2,280,000 |
| | | Smith Jones & Sacher Ltd. | | | | Smith Jones & Sacher Ltd. | | | Accumulated depreciation | $ (488,000) | | | | Net cash flow from operating activities | | | | | | $ 3,545,250.00 |
| | | Income statement fot the 1st and 2nd quarter | | | | Income statement fot the year ended December 31, 2021 | | | Accounts receivable | $ 240,000 | | | | Net income | | | | | $ 3,399,750.00 |
| | | Sales | $ 1,152,000 | | | Sales | $ 2,518,000 | | Cash | $ (11,738) | | | | Add depreciation expense | | | | | $ 384,000.00 |
| | | Cost of the sales | $ 892,000 | | | Cost of the sales | $ 1,929,000 | | | | | | | Less increase in accounts receivable | | | | | $ (20,000.00) |
| | | Gross profit | $ 260,000 | | | Gross profit | $ 589,000 | | Liabilities | $ 202,500 | | | | Less decrease in accounts payable | | | | | $ (100,000.00) |
| | | Depreciation | $ 180,000 | | | Depreciation | $ 368,000 | | Notes payable | $ - 0 | | | | Less decrease in income tax payable | | | | | $ (301,000.00) | | | The income tax is paid at the end of June, so that results in a cash flow |
| | | Sales and marketing | $ 64,000 | | | Sales and marketing | $ 129,000 | | Accounts payable | $ 20,000 | | | | Add increase in salaries payable | | | | | $ 182,500.00 |
| | | Administration | $ 75,000 | | | Administration | $ 150,000 | | Income tax payable | $ - 0 |
| | | Total fixed cost | $ 319,000 | | | Total fixed cost | $ 647,000 | | Salaries payable | $ 182,500 | | | | Net cash flow from investing activities | | | | | | $ (80,000.00) |
| | | Operating income | $ (59,000) | | | Operating income | $ (58,000) | | | | | | | Purchase of new asset | | | | | $ (80,000.00) |
| | | Interest on notes | $ - 0 | | | Interest on notes | $ 18,987.50 | | Stockholders equity | $ 1,817,763 |
| | | Earnings before taxes | $ (59,000) | | | Earnings before taxes | $ (76,988) | | Common stock | $ 2,000,000 | | | | Net cash flow from financing activities | | | | | | $ (120,000.00) |
| | | Taxes | $ (14,750) | | | Taxes | $ (14,750) | | Retained earnings | $ (182,238) | | | | Dividends | | | | | $ (120,000.00) |
| | | | | | | Net Result | $ (62,238) |
| | | | | | | | | | | | | | | Net cash flow | | | | | | $ 3,345,250.00 |
| | | | | | | | | | | | | | | Beginning cash balance | | | | | $ 163,000.00 |
| | | because taxes are calculated at the end of June, we make the income statement for June 31 2021 to calculate the taxes | | | | | | | | | | | | Ending cash balance | | | | | $ 3,366,000.00 |
| | | then, we just take the taxes and paste it into the income statement made on december 31 2021 | | | | | | | | | | | | Difference | | | | | $ 3,203,000.00 |
| | | | | | | | | | Statement of cash flow Year ended December 31, 2021 |
| | | | | | | | | | Net cash flow from operating activities | | $ 285,013 |
| | | | | | | | | | Net income | $ (62,238) |
| | | | | | | | | | Add depreciation expense | $ 368,000 |
| | | | | | | | | | Less increase in accounts receivable | $ (20,000) |
| | | | | | | | | | Less decrease in accounts payable | $ (100,000) |
| | | | | | | | | | Less decrease in income tax payable | $ (83,250) |
| | | | | | | | | | Add increase in salaries payable | $ 182,500 |
| | | | | | | | YOU HAVE TABLES DOWN V V V | | Net cash flow from investing activities | | $ 80,000 |
| | | | | | | | | | Purchase of new asset | $ 80,000 |
| | | | | | | | | | Net cash flow from financing activities | | $ (120,000) |
| | | | | | | | | | Dividends | $ (120,000) |
| | | | | | | | | | Net cash flow | | $ 245,013 |
| | | | | | | | | | Beginning cash balance | $ 163,000 |
| | | | | | | | | | Ending cash balance | $ (11,738) |
| | | | | | | | | | Difference | $ 174,738 |
| | | | | | | | | | Income Statement Dec 31, 2021 |
| | | | | | | | | | Sales | $ 2,518,000 |
| | | | | | | | | | Cost of sales | $ 1,929,000 |
| | | | | | | | | | Gross profit | $ 4,447,000 |
| | | | | | | | | | Depreciation | $ 384,000 |
| | | | | | | | | | Sales and marketing | $ 129,000 |
| | | | | | | | | | Administration | $ 150,000 |
| | | | | | | | | | Total fixed cost | $ 663,000 |
| | | | | | | | | | Operating income | $ 3,784,000 |
| | | | | | | | | | Earnings before taxes | $ 3,784,000 |
| | | | | | | | | | Taxes | $ 384,250 |
| | | | | | | | | | Net result | $ 3,399,750 |
| | | | | | | | | | Income Statement June 31, 2021 |
| | | | | | | | | | Sales | $ 1,152,000 |
| | | | | | | | | | Cost of sales | $ 892,000 |
| | | | | | | | | | Gross profit | $ 2,044,000 |
| | | | | | | | | | Depreciation | $ 368,000 |
| | | | | | | | | | Sales and marketing | $ 64,000 |
| | | | | | | | | | Administration | $ 75,000 |
| | | | | | | | | | Total fixed cost | $ 507,000 |
| | | | | | | | | | Operating income | $ 1,537,000 |
| | | | | | | | | | Earnings before taxes | $ 1,537,000 |
| | | | | | | | | | Taxes | $ 384,250 |
| | | | | | | | | | Net result | $ 1,152,750 |
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AccountingFinal.xlsx
