Tax project

Total Revenue: Gross Sales 7,700,000 Returns and Allowances (100,000) Cost of Goods Sold (800,000)

Gross Profit 6,800,000

Operating Expenses: Compensation of Officers (1,580,000) Wages & Salaries (not included above) (1,550,000) Rental Expense (185,000) Interest Expense (290,000) Fines for Violating EPA Rules (95,000) Advertising (422,000) Charitable Contributions (10,000) Depreciation Expense (120,000) Amortization Expense (17,000) Taxes (763,000) Repairs and Maintenance (412,000) Employee Benefit Programs (681,000) Meals & Entertainment (60,000) Officers' Life Insurance (40,000)

Other Income & Loss:

Interest Income 40,000 Dividend Income 40,000

Net Income (Loss) before Income Tax 655,000 Income Tax Expense (245,000) Net Income for GAAP purposes 410,000

PETERSON GOLF CORPORATION INCOME STATEMENT (GAAP BASIS)

For the Year Ending December 31, 2015

ASSETS 12/31/2014 12/31/2015 Current Assets: Cash 320,000 378,000 Accounts Receivable 1,182,500 1,785,000 Allowance for Doubtful Accounts (40,000) (40,000) Inventory 2,241,000 2,350,000 Investment in Stock 200,000 200,000 Prepaid Federal Income Tax 28,451 50,256

Equipment, Building, and Land: Machinery 300,000 300,000 Furnitures & Fixtures 15,000 15,000 Computer Equipment 20,000 350,000 Commercial Building 2,444,000 2,444,000 Accumulated Depreciation (606,000) (726,000) Land 120,000 120,000

Other Assets: Patent 300,000 300,000 Accumulated Amortization (27,000) (44,000)

Total Assets: 6,497,951 7,482,256

LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts Payable 2,716,951 3,567,256 Notes Payable (less than one year) 750,000 542,000

Notes Payable (one year or more) 741,000 735,000

Common Stock 1,500,000 1,500,000 (3,500,000 shs authorized, 1,500,000 oustanding, $1 par)

Additional Paid-In Capital 660,000 660,000 Retained Earnings 130,000 478,000

Total Liabilities and Shareholders' Equity 6,497,951 7,482,256

PETERSON GOLF CORPORATION BALANCE SHEET (GAAP BASIS)

For the Year Ending December 31, 2015