1. The company will operate for an estimated 5- year period starting Jan.

1, 2016
2. The business prepares its financial statements every calendar year ending
December 31.
3. Annual Sales is assumed to increase by 10% every year.
4. Sales Returns is assumed to be 2% of Gross Sales, 1 % sales Dicounts
5. COS is 60% of the net sales
Raw Materials end is estimated to be 20% of the Raw materials available for use
Goods in process-end is estimated to be 15% of the Raw materials available for use
6. Sales; 95% cash 5% on account every year, except on the 2 nd year;
7. Purchases of raw materials; 75% cash 25% on account
Purchases is estimated to increase by 10% every year
Freight is estimated to be 125000 annually
Purchase returns and allowances is estimated to be 2% of the total purchases, and
1% for purchase discounts based on purchases.
Containers and packaging materials are all paid in cash
8. The company issued 50000 shares, 100 par.
7. Cash dividends amounting to 500,000.00 are declared and paid annually.
9. Office Equipments are estimated to have a useful life of 10 years ,
Furniture and Fixtures; 10 years,
Factory Equipments; 10 years,
Building; 20 years
10. Supplies will be used for the year they are purchased without any unused to be
carried for next year.