Chemalite Case Study

Problem Set #2: Chemalite Case
1. Record the effects of Chemalite’s 1991 events on the BSE worksheet
Cash Flow type (O, I, F)
Event Cash
A/R
375,000
F P1
(7,500)
I P2
(62,500)
I P3
(75,000)
O P4
230,000
-

O
O
O
O
O
O
I
F

-

T1
T2
T3
T4
T5.1
T5.2
T6
T7.1
T7.2
O1
O2
O3
O4
O5
Total

(23,750)
685,000 69,500
(175,000)
(22,500)
(350,000)
(80,000)
(150,000)
50,000
(50,750)

Inventory

75,000
75,000

Patent
Cap. Exp. PPE
125,000
7,500
62,500
125,000

7,500

Notes Pay

62,500

Paid in Capital RE
500,000

-

500,000

Balance Sheet

175,000
(22,500) Adv. Expense
350,000
(80,000) Admin Expenses
150,000

F

50,000
(50,000)

O (750)
(545,000)
(25,000)
(10,625)

(25,000)
(10,625)

69,500

-

(23,750) R&D Expense
754,500 Revenue

(545,000)

113,000

RE Explanation

55,000

100,000

7,500

201,875

-

500,000

Interest Expense
Inv. Adjustment
Amort. Expense
Depr. Expense

46,875 Balance Sheet

15.515 Fall 2003
Session 1

Problem Set #2: Chemalite Case
3. Balance Sheet (6/31/91):
Assets
Cash
Accounts Receivable
Inventories
Total Current Assets
Property, Plant, & Equipment
Other (Capitalized Start-up Expenses)
Patent
Total Assets
Liabilities and Stockholders' Equity
Common Stock
Retained earnings
Total Liabilities and SE

230,000
75,000
305,000
62,500
7,500
125,000
500,000

500,000
500,000
15.515 Fall 2003
Session 1

Problem Set #2: Chemalite Case
3. Income Statement (For 6 months June 30, 1991):
Revenue
Costs and Expenses
Advertising
Administration
Manufacturing costs
Raw materials
R&D
Interest
Depreciation
Amortization of patent

-

-

Net Income

-

15.515 Fall 2003
Session 1

Problem Set #2: Chemalite Case
3. Direct Statement of Cash Flows (6 months ended June 30, 1991):
Cash provided (used) by operating activities
Received from customers
Paid for inventory
Paid for advertising
Paid