Explore BrainMass

Explore BrainMass

    Income Statement for Epics Corporation

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    The following is the December 31, 2003 balance sheet for the Epics 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 and 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 2003 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.

    © BrainMass Inc. brainmass.com June 3, 2020, 7:44 pm ad1c9bdddf
    https://brainmass.com/business/income-statement/income-statement-for-epics-corporation-110738

    Solution Preview

    Plant and Equipment $1,250,000 Equity
    Less: Accum. Deprec. 250,000 Common Stock 300,000
    Net plant and Equipment $1,000,000 Paid In Capital 200,000
    Retained Earnings 480,000
    Total Assets $1,500,000 Total Equity $ 980,000

    Total ...

    Solution Summary

    The solution prepares an income statement for Epics Corporation.

    $2.19

    ADVERTISEMENT