Declan's Designs Balance Sheet Declan's Designs Income Statement ASSETS 12/31/2021 12/31/2022 For the Year Ending Current Assets 12/31/2022 Cash and Cash Equivalents Accounts Receivable, Net Merchandise Inventory $90,000 97,000 400,000 587,000 $294,000 101,000 475,000 870,000 $225,000 (16,000) 209,000 (22,000) 187,000 (12,000) (5,000) 170,000 (7,000) Sales Revenue CGS Gross Margin SG&A Operating Income Interest Expense Loss on Sale of PPE Pre-Tax Income Total Current Assets PPE, Net Goodwill, Net Total Assets 62,000 600,000 $1,249,000 70,000 600,000 $1,540,000 Income Tax Expense LIABILITIES & SHAREHOLDERS' EQUITY Current Liabilities Accounts Payable Interest Payable Dividends Payable Total Current Liabilities Net Income $163,000 26,000 3,000 20,000 49,000 17,000 5,000 10,000 32,000 Additional Information regarding Declan's Designs' 12/31/22 financials: Mortgage Payable Long-Term Bank Loan Total Liabilities 500,000 200,000 732,000 PROPERTY, PLANT & EQUIPMENT PPE is shown net accumulated depreciation. Accumulated depreciation was $18,000 at the beginning of the year and $20,000 at the end of the year. Depreciation expense for the year was $3,000, which is included in SG&A. New PPE was bought during the year for $22,000 (in cash). 500,000 549,000 Shareholder's Equity Preferred Stock Note: You may use the worksheet provided on the last page to help you prepare the Cash Flow Statement. Common Stock Hint #1: The most recent year is not always in the left column. Additional Paid in Capital Retained Earnings Total Shareholder's Equity 8,000 54,000 638,000 700,000 10,000 60,000 738,000 808,000 Hint #2: Evaluate changes in gross PPE separate from changes in accumulated depreciation. Recall gross PPE less accumulated depreciation equals net PPE. Hint #3: Never "plug* the annual change in gross PPE. Separately evaluate the increase in gross PPE (capital expenditures) from the annual decrease in gross PPE (sale of PPE). Total Liabilities &Shareholders' Equity $1,249,000 $1,540,000 Hint #4: The total change in cash due to stock issuances/repurchases is the sum of the change in common stock (stated par value) and additional paid in capital (APIC). Hint #5: Dividends declared (the decrease in RE) is not the same as dividends paid (the decrease in dividends payable). To find dividends paid, set up your dividends payable account with the beginning and ending balances from the balance sheet. Increase dividends paid by the amount of dividends declared. Then plug for the decrease in dividends payable (which represents dividends paid).