The Martins know that setting up some projected Income Statements are important. They need to look at what the first year of operations might look like and if possible they will need to look at the years thereafter to get an impression of what the long term might look like. RM Purchases: $132,000* (Raw Material Purchases is a part of COGS) Sales Salaries: 80,000 Advertising: 3,000 Travel: 2,000 Revenue: 360,000 Financing Costs: 10,000 Office Lease: 13,000 Depreciation: 38,000 Income Taxes: 22,000 Admin Salary: 40,000 A second financial statement that is key to understanding a business is the Balance Sheet. The Martins have estimated the following accounts to be a part of their initial Balance Sheet. Trade Receivables: $35,000 Cash: 15,000 Short Term Loan: 30,000 Share Capital: 100,000 Long Term Liabilities: 60,000 Property, Plant: 170,000 Prepaid Expenses: 5,000 Yearly LTD Retirement: 5,000 Retained Earnings: 25,000 Accumulated Dep’n: 38,000 Current Payables: 17,000 Inventories: 50,000 Q1: With the above accounts, prepare CompuTech’s Income Statement for the year ended, December 31, 2021. Q2: With the above accounts, prepare CompuTech’s Balance Sheet as at December 31, 2021. Q3: Which of the above accounts are FIXED, and which are VARIABLE? Q4: What is the COGS for the year 2021?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The Martins know that setting up some projected Income Statements are important. They need to look at what the first year of operations might look like and if possible they will need to look at the years thereafter to get an impression of what the long term might look like.

RM Purchases: $132,000* (Raw Material Purchases is a part of COGS)

Sales Salaries: 80,000

Advertising: 3,000

Travel: 2,000

Revenue: 360,000

Financing Costs: 10,000

Office Lease: 13,000

Depreciation: 38,000

Income Taxes: 22,000

Admin Salary: 40,000

A second financial statement that is key to understanding a business is the Balance Sheet. The Martins have estimated the following accounts to be a part of their initial Balance Sheet.

Trade Receivables: $35,000

Cash: 15,000

Short Term Loan: 30,000

Share Capital: 100,000

Long Term Liabilities: 60,000

Property, Plant: 170,000

Prepaid Expenses: 5,000

Yearly LTD Retirement: 5,000

Retained Earnings: 25,000

Accumulated Dep’n: 38,000

Current Payables: 17,000

Inventories: 50,000

Q1: With the above accounts, prepare CompuTech’s Income Statement for the year ended, December 31, 2021.

Q2: With the above accounts, prepare CompuTech’s Balance Sheet as at December 31, 2021.

Q3: Which of the above accounts are FIXED, and which are VARIABLE?

Q4: What is the COGS for the year 2021?

Definition Definition Difference in value of a country's net exports and net imports for goods and services in a given period. A positive balance of trade is called a surplus and coincides with more net cash inflows into a country; a negative balance of trade deficit is a deficit and results in net cash outflows. A balance of trade surplus or deficit doesn't necessarily indicate a positive or negative situation for a country.

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