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Epic Corporation

1.The following is the December 31, 2006 balance sheet for the Epic Corporation.

ASSETS LIABILITIES
Cash $ 70,000 Accounts Payable $ 100,000
Accounts Receivable 150,000 Notes Payable 120,000
Inventory 280,000 Bonds Payable 300,000
Total Current Assets $ 500,000 Total Liabilities $ 520,000
Plant and Equipment $1,250,000 Equity
Less: Accum. Deprec. 250,000 Common Stock 300,000
Net plant & Equipment $1,000,000 Paid In Capital 200,000
Retained Earnings 480,000
Total Assets $1,500,000 Total Equity $ 980,000
Total Liab.& Equity $1,500,000

Sales for 2006 were $2,000,000, with the cost of goods sold being 55% of sales. Depreciation expense was 10% of the gross plant and equipment at the beginning of the year. Interest expense was 9% on the notes payable and 11% on the bonds payable. Selling and administrative expenses were $200,000 and the firm's tax rate is 40%.
Prepare an income statement.

** Refer to ATTACHED Excel spreadsheet for additional information **

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** Refer to ATTACHED Excel spreadsheet for additional information **

1.The following is the December 31, 2006 balance sheet for the Epic Corporation.

ASSETS LIABILITIES
Cash $ 70,000 Accounts Payable $ 100,000
Accounts Receivable 150,000 Notes Payable 120,000
Inventory 280,000 Bonds Payable 300,000
Total Current Assets $ 500,000 ...

Solution Summary

This solution is comprised of a detailed explanation to prepare an income statement.

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