Chemalite Case Study
Assignment for Chemalite, Inc.
Part A: Financial statements for Chemalite, Inc. 1) Balance Sheet as at 12/31/2003 | | | ASSETS | | | Current Assets | | | Cash | | $113,000 | Accounts Receivable | | 69,500 | Inventory | | 55,000 | Total Current Assets | | 237,500 | Machinery | | 201,875 | Prototype | | 23,750 | Intangible Assets | | 100,000 | TOTAL ASSETS | | 563,125 | | | | LIABILITIES AND SHAREHOLDERS' EQUITY | | | Current Liabilities | | | Accounts Payable | | 0 | Total Current Liabilities | | 0 | Shareholders' Equity | | | Capital | | 500,000 | Retained Earnings | | 63,125 | Total Shareholders' Equity | | 563,125 | TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | | 563,125 |
2) Income Statement for the year ended 12/31/2003 Net sales | $754,500 | Cost of Sales | -$545,000 | Gross profit | $209,500 | Advertising | -$22,500 | Depreciation | -$35,625 | Salaries and wages | -$80,000 | Incorporation expenses | -$7,500 | Operating income | $63,875 | Interest expenses | -$750 | Earnings before Income tax expenses | $63,125 | Tax | - | Net Income | $63,125 |
3) Statement of Cash Flows for the year ended 12/31/2003 Operations | | Net Income | $63,125 | Depreciation | $35,625 | Account Receivable | -$69,500 | Inventory | -$55,000 | Cash flow from operations | -$25,750 | | | Investing | | Machinery | -$212,500 | Prototype | -$23,750 | Cash flow from investing | -$236,250 | | | Financing | | Cash flow from financing | - | | | Net Change in Cash for This Period | -$262,000 | | | Cash, Jan. 2 2003 | $375,000 | | | Cash, Dec. 31 2003 | $113,000 |
Appendix 1: journal entries
⑴January 2
Cash ……………………………………………………………………………………………………. 375,000
Contributed Capital …………………………………………………………………………………………….375, 000 Assets | = | Liabilities | + | Shareholders’ Equity |
Part A: Financial statements for Chemalite, Inc. 1) Balance Sheet as at 12/31/2003 | | | ASSETS | | | Current Assets | | | Cash | | $113,000 | Accounts Receivable | | 69,500 | Inventory | | 55,000 | Total Current Assets | | 237,500 | Machinery | | 201,875 | Prototype | | 23,750 | Intangible Assets | | 100,000 | TOTAL ASSETS | | 563,125 | | | | LIABILITIES AND SHAREHOLDERS' EQUITY | | | Current Liabilities | | | Accounts Payable | | 0 | Total Current Liabilities | | 0 | Shareholders' Equity | | | Capital | | 500,000 | Retained Earnings | | 63,125 | Total Shareholders' Equity | | 563,125 | TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | | 563,125 |
2) Income Statement for the year ended 12/31/2003 Net sales | $754,500 | Cost of Sales | -$545,000 | Gross profit | $209,500 | Advertising | -$22,500 | Depreciation | -$35,625 | Salaries and wages | -$80,000 | Incorporation expenses | -$7,500 | Operating income | $63,875 | Interest expenses | -$750 | Earnings before Income tax expenses | $63,125 | Tax | - | Net Income | $63,125 |
3) Statement of Cash Flows for the year ended 12/31/2003 Operations | | Net Income | $63,125 | Depreciation | $35,625 | Account Receivable | -$69,500 | Inventory | -$55,000 | Cash flow from operations | -$25,750 | | | Investing | | Machinery | -$212,500 | Prototype | -$23,750 | Cash flow from investing | -$236,250 | | | Financing | | Cash flow from financing | - | | | Net Change in Cash for This Period | -$262,000 | | | Cash, Jan. 2 2003 | $375,000 | | | Cash, Dec. 31 2003 | $113,000 |
Appendix 1: journal entries
⑴January 2
Cash ……………………………………………………………………………………………………. 375,000
Contributed Capital …………………………………………………………………………………………….375, 000 Assets | = | Liabilities | + | Shareholders’ Equity |