Income Statement Make sure you read the pdf linked above Sales COGS [No- before the number.] Salary expense [No - before the number.] Insurance expense [No - before the number.] Depreciation expense [No - before the number.] Current tax expense [No deferred taxes; No - before the number.] Year 1 Year 3 (THREE) 31 Checks 32 C1: NI Dividends - Change in RE = 0 33 C2: Net cash flow - Change in cash = 0 Year 1 Year 2 Year 3 34 C3: A (L+ E) = 0 35 Inputs 36 Balance sheet 37 Gross receivables [No allowance] 38 Inventories 39 Prepaid insurance or deferred insurance expense 40 Net PP&E 41 Deferred revenues 42 Accounts payable to suppliers 43 Accrued salaries or salary payable 44 Tax payable 5 Operating cash flows 46 Cash received from customers 47 Cash (paid) to suppliers of inventory Year 1 Year 2 Year 3 120.00 640.00 1260.00 220.00 124.00 432.00 372.00 296.00 468.00 1064.00 1024.00 1108.00 220.00 260.00 288.00 108.00 140.00 76.00 280.00 664.00 1112.00 40.32 52.16 42.88 4960.00 5380.00 5768.00 -800.00 -840.00 ##### 48 Cash (paid) for salaries 49 Cash (paid) for insurance 50 Taxes (paid) 51 Investing cash flow 52 (Purchase of PP&E or capital expenditures) ##### ##### ##### ##### ***** ***** ***** -362.88 -509.76 -438.08 0.00 0.00 0.00 -400.00 -440.00 63 Financing cash flow 54 Stock issued 2000.00 55 (Dividends) paid -40.00 100.00 140.00 -44.00 -48.00 56 Derived income statement Year 1 Year 2 57 58 59 50 51 52 53 54 55 56 57 58 59 70 71 22 73 74 75 76 27 78 ود 30 Ending balance sheet 31 Cash 32 Gross receivables [No allowance] B3 Inventories 34 Prepaid insurance or deferred insurance expense 35 Net PP&E 36 Deferred revenues 37 Accounts payable to suppliers 38 Accrued salaries or salary payable 89 Tax payable 90 Contributed capital 91 Retained earnings 92 Cash-flow statement Year 3 = Cash received from customers [Positive number] + Change in receivables Change in deferred revenues = Sales revenues Cash (paid) to suppliers [Payments are negative numbers.] Change in payable Subtotal (purchases) Change in inventory = (COGS) [Expenses are negative numbers here.] = Salary (paid) [Payments are negative numbers.] Change in salary payable (Salary expense) [Expenses are negative numbers here.] = Insurance (paid) [Payments are negative numbers.] + Change in prepaid insurance = Insurance (expense) [Expenses are negative numbers here.] = (Capex) [Payments are negative numbers.] +Change in net PPE (Depreciation expense) [Expenses are negative numbers here.] = tax (paid) [Payments are negative numbers.] Change in taxes payable [Assume no deferred taxes] = (Current tax expense) [Expenses are negative numbers here.] = Net income [Revenues + expenses because expenses are negative numbers here.] Previous cash + Net cash flow Year 1 Year 2 Year 3 Given Given Given given Given given Given given Given Given Given given Given Previous capital + Stock issued [13] Previous retained earnings + Net income [42] + (Dividends) Year 1 Year 2 Year 3 93 Cash received from customers Given 94 Cash (paid) to suppliers of inventory Given 95 Cash (paid) for salaries Given 96 Cash (paid) for insurance 97 Taxes (paid) 98 Operating cash flow 99 (Purchase of PP&E or capital expenditures) 00 Investing cash flow 01 Stock issued 02 (Dividends) paid Given Given Subtotal Given Subtotal 03 Financing cash flow 04 Net cash flow 05 06 07 Given Given Subtotal Subtotal