Toy World Level Production Balance Sheet and Income Statement

Table A

Table A: Condensed Income Statements, 1991-1993 (thousands of dollars)

1991

1992

1993

Net sales Cost of goods sold Gross profit Operating expenses Interest expense Interest income Profit before taxes Federal income taxes Net profit

$5,213 3,597 $1,616 1,199 68 20 $369 125 $244

$6,167 4,440 $1,727 1,542 75 15 $125 43 $82

$7,967 5,577 $2,390 1,912 85 16 $409 139 $270

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Table B

Table B: Balance Sheet at December 31, 1993 (thousands of dollars)

Cash Accounts receivable Inventory Current assets Plant and equipment, net Total assets Accounts payable Notes payable, bank Accrued taxes(a) Long-term debt, current portion Current liabilities Long-term debt Shareholders' equity Total liabilities and shareholders' equity

$200 2,905 586 $3,691 1,176 $4,867 $282 752 88 50 $1,172 400 3,295 $4,867

(a)The company was required to make estimated tax payments on the 15th of April, June, September, and December. In 1993 it elected to base its estimated tax payments on the previous year's tax. The balance of $88,000 was due on March 15, 1994.

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Table C

Table C: Monthly Sales Data (thousands of dollars)

Sales 1993 Actual 1994 Projected

Total $7,967 $10,000

Jan $64 $120

Feb 88 140

Mar 96 160

Apr 88 140

May 87 140

Jun 95 140

Jul 96 160

Aug 1,251 1,620

Sep 1,474 1,840

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Table C

Oct 1,723 2,140

Nov 1,965 2,285

Dec 940 1,115

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Exhibit 1

Exhibit 1

Pro Forma Balance Sheets Under Seasonal Production, 1994 (thousands of dollars)

Note

Actual Dec. 31, 1993

Jan.

Feb.

Mar.

Apr.

May

June

July

Aug.

Cash Accounts receivable Inventory Current assets Net plant and equipment Total assets

(a) (b) (c)

$200 2,905 586 $3,691

$878 1,060 586 $2,524 1,176 $3,700 $36 0 31 50 $117 400 3,183

$1,526 260 586 $2,372 1,176 $3,548 $42 0 (23) 50 $69 400 3,079

$1,253 300 586 $2,139 1,176 $3,315 $48 0 (162) 50 ($64) 400 2,979

$1,054