The following is the December 31, 2010 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 2010 were $3,000,000, with the cost of goods sold being 60% 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.
Debenture Valuation
A debenture is a private and long-term debt instrument issued by financial, non-financial institutions, governments, or corporations. A debenture is classified as a type of bond, where the instrument carries a fixed rate of interest, commonly known as the ‘coupon rate.’ Debentures are documented in an indenture, clearly specifying the type of debenture, the rate and method of interest computation, and maturity date.
Note Valuation
It is the process to determine the value or worth of an asset, liability, debt of the company. It can be determined by many processes or techniques. Many factors can impact the valuation of an asset, liability, or the company, like:
. The following is the December 31, 2010 balance sheet for the Epics Corporation.
|
Assets |
|
Liabilities |
|
|
Cash |
$ 70,000 |
|
Accounts Payable $ 100,000 |
|
|
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 |
|
|
|
|
|
|
Total Assets |
$ 1,500,000 |
|
Total Equity $ 980,000 |
|
|
|
Total Liab. & Equity $ 1,500,000 |
Sales for 2010 were $3,000,000, with the cost of goods sold being 60% of sales.
Prepare an income statement.
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