Mountain State Sporting Goods (Fraud Investigation Phases I-III.)

Appendix E Mountain State Sporting Goods Annual Report

Dec 31, 08 Dec 31, 07 $ Change ASSETS Current Assets

Checking/Savings Checking 63,904.00 82,803.00 -18,899.00

Total Checking/Savings 63,904.00 82,803.00 -18,899.00

Other Current Assets Inventory 296,776.00 281,147.00 15,629.00

Total Other Current Assets 296,776.00 281,147.00 15,629.00

Total Current Assets 360,680.00 363,950.00 -3,270.00

Fixed Assets _Furniture and Equipment 123,498.00 83,498.00 40,000.00 Accumulated Depreciation -73,358.00 -66,824.00 -6,534.00

Total Fixed Assets 50,140.00 16,674.00 33,466.00

Other Assets Other Asset 1,253.00 1,253.00 0.00

Total Other Assets 1,253.00 1,253.00 0.00

TOTAL ASSETS 412,073.00 381,877.00 30,196.00

LIABILITIES & EQUITY

Liabilities Current Liabilities

Other Current Liabilities Payroll Liabilities Payable 51,789.00 49,169.00 2,620.00 Sales Tax Payable 18,410.00 16,593.00 1,817.00

Total Other Current Liabilities 70,199.00 65,762.00 4,437.00

Total Current Liabilities 70,199.00 65,762.00 4,437.00

Long Term Liabilities Long Term Debt 42,579.00 44,441.00 -1,862.00

Total Long Term Liabilities 42,579.00 44,441.00 -1,862.00

Total Liabilities 112,778.00 110,203.00 2,575.00 Equity

Capital Stock 1,000.00 1,000.00 0.00 Dividends 0.00 -9,066.00 9,066.00 Retained Earnings 270,674.00 244,951.00 25,723.00 Net Income 27,621.00 34,789.00 -7,168.00

Total Equity 299,295.00 271,674.00 27,621.00

TOTAL LIABILITIES & EQUITY 412,073.00 381,877.00 30,196.00

Jan - Dec 08 Jan - Dec 07 Ordinary Income/Expense

Income Sales 2,513,479.00 2,339,496.00

Total Income 2,513,479.00 2,339,496.00 Cost of Goods Sold

Cost of Goods Sold 2,080,909.00 1,926,462.00 Total COGS 2,080,909.00 1,926,462.00

Gross Profit 432,570.00 413,034.00 Expense

Advertising and Promotion 27,512.00 18,778.00 Delivery 12,669.00 12,241.00 Depreciation Expense 6,534.00 6,588.00 Insurance Expense 38,149.00 32,609.00 Misc. Expense 3,115.00 2,736.00 Office Supplies 4,350.00 3,656.00 officers Compensation 50,000.00 50,000.00 Outside Labor 698.00 771.00 Postage 1,310.00 1,082.00 Rent Expense 24,000.00 24,000.00 Repairs and Maintenance 1,769.00 1,268.00 Salaries & Wages 161,315.00 157,320.00 Supplies 2,021.00 1,670.00 Taxes & Licenses 54,543.00 50,232.00 Telephone Expense 3,667.00 2,933.00 Travel and Entertainment 6,051.00 5,217.00 Utilities 7,246.00 7,144.00

Total Expense 404,949.00 378,245.00 Net Ordinary Income 27,621.00 34,789.00

Net Income 27,621.00 34,789.00