B A L A N C E S H E E T F O R P E P S IC O , IN C

F ig u r e s in m illio n o f d o lla r s
s s e ts L ia b ilt ie s & s h a re h o ld e r e q u it ie s
u r re n t a s s e t s C u rr e n t lia b ilit ie s
a s h a n d e q u iva le n t s 3 1 1 1 , 9 2D8 e b t d u e fo r r e p a y m e n t 3 , 9 2 1 0
a rk e t a b le s e c u r it ie s 83 9 5 5A c c o u n t P a y a b le 3 8 7 0 3 ,6 1
e c e iva b le s 2 , 4 5 3 2 , 1 5O0 t h e r c u r r e n t lia b ilit ie s 1 2 3 64
ve n t o rie s 1 , 0 1 6 7 3 2T o t a l c u r r e n t lia b ilit ie s 7 , 9 1 4 4 , 2 5
th e r c u rre n t a s s e ts 499 4 8 6L o n g - t e r m d e b t 4 ,0 2 8 4 ,9 4
o t a l c u rre n t a s s e ts 4 3 6 2 6 , 2 5O1 t h e r lo n g - t e rm d e b t 4 , 3 1 7 3 , 9 6
ix e d a s s e t s t o t a l lia b ilit ie s 1 6 ,2 5 9 1 3 ,1
r o p e r t y , p la n t , a n d e q u1ip3 m, 1 e1 n0 t 1 1 , 2 9S4h a r e h o ld e r 's e q u it y
e s s : A c c u m u la t e d d e p 5r e, 7c 9ia2t io 5n , 0 3c3o m m o n s t o c k 1 ,1 9 5 1 ,3 4
e t fix e d a s s e t s 7 , 3 1 8 6 , 2 6R1 e t a in e d e a rn in g s 5 ,2 0 6 5 ,5 9
t a b g ib le a s s e t s 8 , 9 9 6 5 , 8 5T5o t a l s h a r e h o ld e r s ' e q u it6y, 4 0 1 6 , 9 3
th e r a s s e ts 1 ,9 8 4 1 ,7 3 4
o ta l a s s e ts 2 2 , 6 6 0 2 0 , 1 0T1o t a l lia b ilit ie s a n d s h a 2r e2h, 6o 6ld0e2r 0 , 1
INCOME STATEMENT FOR PEPSICO,INC.
Figures in millions of dollars
Net sales 22,348
Cost of goods sold 9,330
Other expenses 291
Selling, general, and admin. Exp 8,912
Depreciation 1,234
Earning before tax and interest 2,581
Interest expense 321
Taxable income 2,260
Taxes 270
Net Income 1,990
Dividend 1,233
Retained earning 757
ABC COMPANY
INCOME STATEMENT DATA

PURCHASES 175,000
SALES 500,000
SALES RETURN 5000
OPENING STOCK 28,500
ADMINISTRATIVE EXPENSE 50,000
SELLING EXPENSE 60,000
INTEREST EXPENSE 20,000
INCOME TAX(40%) ?
DIVIDEND PAID 10,000
DIVIDENT PROPOSED 20,000
CLOSING STOCK 18,500

Required: Prepare Income statement

INCOM ESTATEM ENT-ABCCO
SALES 500,000
SALESRETURN 5000
NETSALES 495,000
LESS: COSTO FGOO DSSOLD
O PENINGSTOCK 28,500
PURCHASES 175,000
LESS :CLO SINGSTOCK 18,500
COST 185,000
G ROSSPROFIT 310,000
LESS:OPERATINGEXPENSE
ADM INISTRATIVEEX PENSE 50,000
SELLINGEX PENSE 60,000
TOTALEX PENSE 110,000
EARNINGBEFOREINTERESTANDTAX 200,000
INTERESTEX PENSE 20,000
EARNINGAFTERINTEREST 180,000
INCOM ETAX (40% ) 72000
EARNINGAFTERTAX 108,000
DIVIDENDPAID 20,000
DIVIDENTDPROPOSED 30,000
RETAINEDEARNING 58,000
BALANCE S HEET DATA O F ABC CO .

CASH 7 0 , 0 A0 0/ C R E C E IV A B L E 6 0 ,0
C O M M O N S T O C K 5 0 0 , 0R0E0 S E R V E 5 0 ,0
C L O S IN G S T O C K 1 8 , 5 A0 0C C U M U L A T E D D E1 1P 6. ,
A /C P A Y A B L E 3 7 , 0 P0 0R E P A Y M E N T S 1 5 ,0
A C C R U E D E X P E N S3 E5 , 0 0 0
L O N G - T E R M L O A N2 0 0 , 0 0 0
F IX E D A S S E T S 9 0 0 ,0 0 0
R E T A IN E D E A R N IN1 2G 5 , 0 0 0

R e q u ir e d : P re p a re c la ssifie d B a la n c e S h e e
 B A L A N C E S H E E T -A B C C O .

CURRENT AS S ETS C U R R E N T L IA IL IT Y
CASH 7 0 , 0 0 A0 / C P A Y A B L E 3 7 ,0 0
A /C R EC E IV A B L E 6 0 , 0 0 A0 C C R U E D E X P E N S E 3 5 ,0 0
P REP AYM ENTS 1 5 , 0 0 T0 O T A L C U R R E N T L I A B I L 7I T2Y, 0 0
C L O S IN G S T O C K 1 8 ,5 0 0
T O T A L C U R R E N T A S S E1T6S3 , 5 0F0I X E D L I A B I L I T Y
L O N G -T E R M L O A N 2 0 0 ,0 0

F IX ED A S S ET S 9 0 0 , 0 0S0 H A R E H O L D E R 'S E Q U I T Y
L E S S :A C C U M U L A T E D D1E1P6 5 0C0 O M M O N S T O C K 5 0 0 ,0 0
R ES ERV E 5 0 ,0 0
R ET A IN E D E A R N IN G 1 2 5 ,0 0
6 7 5 ,0 0
94 7 ,0 0 0 9 4 7 ,0 0
 B A L A N C E S H E E T -A B C C O .
F IX E D A S S E T S 9 0 0 , 0 0S0 H A R E H O L D E R 'S E Q U I T Y
L E S S :A C C U M U L A T E D D-1E 1P6 5 0C0 O M M O N S T O C K 5 0 0 ,0 0
R ES ERV E 5 0,00
R ET A IN E D E A R N IN G 1 2 5 ,0 0
CURRENT AS S ETS 6 7 5 ,0 0
C L O S IN G S T O C K 1 8 ,5 0 0
P R E P A Y M E N TS 1 5 , 0 0 F0 I X E D L I A B I L I T Y
A / C R E C E IV A B L E 6 0 , 0 0 L0 O N G -T E R M L O A N 2 0 0 ,0 0
CASH AND BANK 7 0 ,0 0 0
C U R R E N T L IA IL IT Y
A /C P A Y A B L E 3 7,00
ACCRUED EX P ENS E 3 5,00
T O T A L C U R R E N T L I A B I L I7T2Y, 0 0
9 4 7 ,0 0 0 9 4 7 ,0 0
 CLASS ACTIVITY
Q: SALES RS. 500,000
COST OF GOODS SOLD 75% OF SALES
GROSS PROIFT ??????
OPERATING EXPENSE 70,000
EBIT ?????

Q: cost of goods sold is Rs. 765,000 which is

65% of sales.
Operating expense is 20% of sales and interest
expense is 2.5% of sales
Prepare INCOME STATEMENT
 FORMULAS
1. SALES-COST = GROSS PROFIT
2. OP.STOCK+PURCHASES-CL.STOCK=
COST
3. GROSS PROFIT-OPERATING
EXPENSE=EBIT
4. EBIT-INTEREST= EBT
5. EBT-TAX = EARNING AFTER TAX

6. EARNING AFTER TAX-DIVIDEND=

RETAINED EARNING
 ANSWER
SALES RS. 500,000
COST OF GOODS SOLD 375,000
GROSS PROFIT 125,000
OPERATING EXPENSE 70,000
EARNING BEFORE INTEREST AND TAX
RS, 55,000

SALES RS. 1176923

OPERATING EXPENSE RS. 235385
INTEREST EXPENSE RS. 29423
 ACTIVITY

RETAINED EARNING-1998 $ 47,500

PROFIT AFTER TAX AND INTEREST $320,700
CASH DIVIDEND $ 25,000

CASH DIVIDEND PROPOSED $ 50,000

RETAINED EARNING-1999 $ ???
 ACTIVITY
• SALES $ 800,000
• COST 68% OF SALES
• OPERATING EXPENSE 18% OS SALES
• INTEREST EXPENSE 40,000
• TAX 40%
• COMMON STOCK $ 600,000
• DIVIDEND PAID 20%
• Prepare income statement
 ACTIVITY
• GROSS PROFIT 25%
• COST OF GOODS SOLD $ 375,000
• OPERATING EXPENSE 15% OF SALES
• LOAN $ 500,000
• INTEREST ON LOAN 10%
• DIVIDEND PAID 25% ( COMMON
STOCK $ 800,000)
 ACTIVITY
• Cash 100,000
• Plant 350,000
• Equipment 75,000
• Closing stock 120,000
• A/c Payable 90,000
• Long-term loan 200,000
• Common stock 10,00,000
• Reserve 150,000
• Retained earning ????
• Accrued expense 15,000
• Marketable securities 85,000

Prepare balance sheet