Dispensers of California, Inc

Balance Sheet Transaction Analysis

Transactions

Assets =

1a
1b
2
3

Hynes investment
Other investors
Incorporation costs
Equipment purchase

4
5

Redesign costs
Component parts purchase

Bank loan
Bank loan repaid
Loan interest
Manufacturing payroll
Other manufacturing costs
Selling general and administration
Ending inventory (cost of goods sold) *
Sales
Incorporation and redesign costs (expenses as
incurred)
Depreciation
Patent amortization
Ending work-in-progress and completed
inventory (none) (cost of goods sold)**
Dividends
Income Taxes

7
8
9
10
11
12
13
14
15
16
17

* Beginning component parts inventory

Purchases
Total available
Ending component parts inventory
Components parts used

$0
212,100
212,100
15,100
197,000

+ Patent $120,000
+ Cash 80,000
- Cash $2,500
-Cash $85,000
+ Equipment 85,000
- Cash $25,000
+ Inventory $212,100
- Cash 212,100
+ Cash $30,000
- Cash 30,000
- Cash 500
- Cash $145,000
- Cash 62,000
- Cash $63,000
- Inventory $197,000
+ Cash $598,500
See 2 and 4

Liabilities

Equity
+ Common Stock $120,000
+ Common Stock 80,000
- Retained earnings $2,500

- Retained earnings $25,000

+Bank loan $30,000

- Bank loan 30, 000
- Retained earnings $500
- Retained earnings $145,000
- Retained earnings $62,000
- Retained earnings $63,000
- Retained earnings $197,000
+ Retained earnings $598,500

- Equipment $8,500
- Patent $20,000
See 5, 7, 8, 10 and 13

- Retained earnings $8,500

- Retained earnings $20,000

- Cash $5,000
+Taxes payable $22,500
**Component parts used
Manufacturing payroll
Other manufacturing costs
Depreciation
Cost of goods sold

$197,000
145,000
62,000
8,500
412,500

- Retained earnings $5,000

- Retained earnings $22,500

Dispensers of California, Inc.

12-month Profit Plan

Sales
Cost of goods sold
Components
Mfg payroll
Other Mfg.
Depreciation
Gross margin
Selling, general and
Administration
Patent
Redesign costs
Incorporation costs
Operating profit
Interest
Profit before taxes
Tax expense
Net Income

$598,500
$197,000
145,000
62,000
8,500

412,500
$186,000
63,000
20,000
25,000
2,500
$75,500
500
$75,000
22,500
$52,500

Dispensers of California, Inc.

Projected Year-end Balance Sheet

Assets
Cash
Components inventory
Current assets
Equipment (net)
Patent (net)

$78,400
15,100
$93,500
76,500
100,000
___
$270,000

Liabilities
Taxes payable
Current liabilities
Owners Equity
Capital stock
Retained earnings

$22,500
$22,500

$200,000
47,500
$270,000

Dispensers of California, Inc.

Change in Retained Earnings

Beginning retained earnings

Net income
Dividends
Ending retained earnings

$0
52,500
(5,000)
$47,500

Dispensers of California, Inc.

Cash Reconciliation

New equity capital

Incorporation
Equipment
Redesign
Component parts
Bank loan
Bank loan
Loan interest
Manufacturing payroll
Other manufacturing
SG&A
Sales
Dividend
Total

Cash Reconciliation
Receipts
Disbursements
Ending Balance

$708,500
630,100
$78,400

Receipts
$80,000

Disbursements
$2,500
85,000
25,000
212,100

30,000
30,000
500
145,000
62,000
63,000
598,500
$708,500

5,000
$630,100

Dispensers of California, Inc.

Statement of Cash Flows (Direct Method)

Collections from customers

Payments to suppliers
Payments to employees
Legal payments
Interest
Operating cash flow
Equipment purchases
Investing cash flow
Bank loan
Repayment of bank loan
Capital
Dividends
Financing cash flow
Change in cash
Beginning cash
Ending cash

$598,500
(212,100)
(295,000)
(2,500)
(500)
$89,400
(85,000)
$(85,000)
30,000
(30,000)
80,000
(5,000)
$75,000
$78,400
0
$78,400