Senior Accountant Scenario

ATTATCHMENT2FINANCIALSTATEMENTS.docx

SUNSTRUCK SUNGLASSES INCOME STATEMENT For Year Ended September 30, 2016
REVENUES
Sales revenues	$778,590
Other revenue	$11,000
Total revenue	$789,590
COST OF GOODS SOLD (COGS)	($428,225)
GROSS PROFIT	$361,365
EXPENSES
Depreciation and amortization	($18,820)
Selling, general and administrative expenses	($78,959)
Marketing and advertising expenses	($55,271)
Total expenses	($153,050)
INCOME FROM OPERATIONS	$208,314
OTHER EXPENSES
Interest expense	($51,000)
PRETAX INCOME	$157,315
Income tax expense	($55,060)
NET INCOME	$102,255$22,500

SUNSTRUCK SUNGLASSES BALANCE SHEET At September 30, 2016
ASSETS
CURRENT ASSETS
Cash	$28,000
Accounts receivable	$55,220
Merchandise inventories	$62,280
Total current assets		$145,500
LONG-TERM ASSETS
Property, truck and equipment		$468,000
TOTAL ASSETS		$613,500
LIABILITIES
CURRENT LIABILITIES
Accounts Payable		$37,500
LONG-TERM LIABILITIES
Truck loan	$40,000
B+M loan	$360,000
Operating loan	$42,000
Total long-term liabilities		$442,000
TOTAL LIABILITIES		$479,500
SHAREHOLDERS’ EQUITY
CONTRIBUTED CAPITAL	$12,000
RETAINED EARNINGS	$122,000
TOTAL SHAREHOLDERS’ EQUITY		$134,000
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$613,500

SUNSTRUCK SUNGLASSES STATEMENT OF CASH FLOWS For Year Ended September 30, 2016
CASH FLOWS FROM OPERATING ACTIVITIES
Cash collected from customers	$733,780
Cash paid to suppliers and employees	($529,580)
Cash paid for interest	($50,000)
Cash paid for taxes	($55,060)
Net cash provided by operating activities	$99,140
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid on truck loans	($20,000)
Cash paid on B+M loans	($40,000)
Net cash used for investing activities	($60,000)
CASH FLOWS FROM FINANCING ACTIVITIES
Cash received from operating cash loan	$12,000
Net cash provided by financing activities	$12,000
NET INCREASE IN CASH DURING YEAR	$51,140
$75,000 CASH AT BEGINNING OF YEAR	($23,255)
CASH AT THE END OF YEAR TO DATE	$27,885