Hercules Inc.

Balance Sheet
As Of December 31,2017

Assets Liabilities &Equity

Current Assets Liabilities
Cash $7,000 Accounts Payable
Account Receivables $30,000 Notes Payable
Total Current Assets $37,000 Total Liabilities
Fixed Assets Equity
Office Equipment $179,000 Retained Earnings
Building $250,000 Capital Stock
Land $90,000 Total Equity
Total Fixed Assets $519,000
Total Assets $556,000 Total Liabilities & Equity

a) Total Assets=$556,000 b)Total Assets=Total Liabilities&Equity

Total CA+Total FA=556,000 Total Assets=$556,000 implies Total Liabiliti
(Cash+A.R.)+(Equipment+Building+Land)=$556,000 Total Liabilities&Equity = Total Liabilities+T
(7,000+30,000)+(x+250,000+90,000)=$556,000 Total Liabilities&Equity=(Accounts Payable
37,000+(x+250,000+90,000)=$556,000 556,000=(12,000+135,000)+(y+188,000)
37,000+x+250,000+90,000=$556,000 556,000=147,000+y+188000
x+377,000=$556,000 556,000-147000-188000=y
x=556,000-377000 y=221,000
x=$179,000 Implies Retained Earnings=$221,000
Office Equipment =$179,000
lities &Equity
iabilities
$12,000
$135,000
$147,000
Equity
$221,000.00
$188,000.00
$409,000.00

$556,000.00

al Assets=Total Liabilities&Equity
Assets=$556,000 implies Total Liabilities&Equity=$556,000
Liabilities&Equity = Total Liabilities+Total Equity
Liabilities&Equity=(Accounts Payable+Notes Payable)+(Retained Earnings+Capital Stock)
00=(12,000+135,000)+(y+188,000)
00=147,000+y+188000
00-147000-188000=y

s Retained Earnings=$221,000
Net Income Before Adjustment=$232,000
Depreciation Expenses=$4,300
Supplies Expenses=$300
Fees earned in March that had been collected im advance=$3,600 which means Client Revenue earned= $3,600

Net Income=Total Revenue-Total Expenses

Adjusted Net Income=Total Revenue-Total Expenses
Adjusted Net Income=Client Revenue Earned-(Depreciation Expenses+Supplies Expenses)
Adjusted Net Income=3600-(4300+300)
Adjusted Net Income=3600-4600
Adjusted Net Income=-$1000

Therefore Net Income Total for March After Adjustment=232,000-1000=$231,000

earned= $3,600
 Adelphi Contruction
Balance Sheet
As Of December 31,2017
Assets Liabilities &Equity
Current Assets Liabilities
Cash $5,000 Accounts Payable
Account Receivables $85,000 Notes Payable
Income Taxes Payable
Total Current Assets $90,000 Total Liabilities
Fixed Assets Equity
Office Equipment $96,000 Retained Earnings
Building $250,000 Capital Stock
Land $184,000 Total Equity
Total Fixed Assets $530,000
Total Assets $620,000 Total Liabilities & Equity

1)Consider Cash = x 2) Cash+AR=1+1/2 NP

Total Liabilities&Equity = $620,000 Cash+AR=1.5NP
Then Total Assets=Total Liabilties&Equity = $620,000 90,000=1.5NP
x+85,000+96,000+250000+184000=620,000 NP=$60,000
x=620,000-85000-96000-250000-184000
x=620,000-85000-96000-250000-184000
Then Cash=5,000

4)Retained Earning Dec 31,2014= 5)Consider Capital Stock = Z

Retained Earning Jan 1 2014 - Total Liabilities+Total Equity =$620,0
Add: NI USD 275,000.00 Notes Payable+Accounts Payable+In
Sub total USD 275,000.00 $60,000+$115,000+$40,000+Z+$205
Less: Dividends -USD 70,000.00 Z=$620,000-$60,000-$115,000-$40,
Retained Earning Dec 31 2014 USD 205,000.00 Z=$200,000
iabilities &Equity
Liabilities
$115,000
$60,000
$40,000
$215,000
Equity
USD 205,000.00
USD 200,000.00
USD 405,000.00

USD 620,000.00

3)AP+60,000+40,000=$215000
Consider AP=Y
Y=215000-40,000-60,000
Y=$115,000

nsider Capital Stock = Z

l Liabilities+Total Equity =$620,000
s Payable+Accounts Payable+Income Taxes Payable+Z+205,000=$620,000
000+$115,000+$40,000+Z+$205,000=$620,000
20,000-$60,000-$115,000-$40,000-$205,000
 Date Cash Balance
2-Mar $80,000.00
Balance $80,000.00 Total Assets
4-Mar $10,000.00 Total Current Assets

Accounts
Date Cash
Receivable
Balance $70,000.00
14-Mar - 2 $80,000.00 $0.00
Balance $70,000.00 4 -$10,000.00 $0.00
15-Mar $6,700.00 Balance $70,000.00 $0.00
Balance $63,300.00 14 - $9,500.00
19-Mar $800.00 Balance $70,000.00 $9,500.00
Balance $62,500.00 15 -$6,700.00
20-Mar $4,200.00 Balance $63,300.00 $9,500.00
Balance $66,700.00 19 -$800.00
28-Mar - Balance $62,500.00 $9,500.00
Balance $66,700.00 20 $4,200.00 -$4,200.00
29-Mar $6,000.00 Balance $66,700.00 $5,300.00
Balance $60,700.00 28 - $12,200.00
30-Mar $7,200.00 Balance $66,700.00 $17,500.00
Balance $53,500.00 29 -$6,000.00 -
30-Mar - Balance $60,700.00 $17,500.00
Balance - 30 -$7,200.00
30-Mar $53,500.00 Balance $53,500.00 $17,500.00
30 -
Balance $53,500.00 $17,500.00
30
Balance $53,500.00 $17,500.00
Total Assets $131,000.00
Assets Total Liabilities&Equity
Total Fixed Assets Total Liabilities Total Equity

Accounts Notes Dividends Capital

Truck = Retained Earnings
Payable Payable Payable Stock

$0.00 $0.00 $80,000.00

$60,000.00 $50,000.00
$60,000.00 $50,000.00 $80,000.00
- $9,500.00
$60,000.00 $50,000.00 $80,000.00 $9,500.00
-$6,700.00
$60,000.00 $50,000.00 $80,000.00 $2,800.00
-$800.00
$60,000.00 $50,000.00 $80,000.00 $2,000.00
-
$60,000.00 $50,000.00 $80,000.00 $2,000.00
$12,200.00
$60,000.00 $50,000.00 $80,000.00 $14,200.00
$50,000.00 -$6,000.00
$60,000.00 $50,000.00 $80,000.00 $8,200.00
-$7,200.00
$60,000.00 $50,000.00 $80,000.00 $1,000.00
$720.00 -$720.00
$60,000.00 $720.00 $50,000.00 $80,000.00 $280.00
- $1,000.00 -$1,000.00
$60,000.00 $720.00 $50,000.00 $1,000.00 $80,000.00 -$720.00
$131,000.00 Total Liabilties & Equity $131,000.00
Total Equity
Total Equity

Retained Earnings

$9,500.00
$9,500.00
-$6,700.00
$2,800.00
-$800.00
$2,000.00
-
$2,000.00
$12,200.00
$14,200.00
-$6,000.00
$8,200.00
-$7,200.00
$1,000.00
-$720.00
$280.00
-$1,000.00
-$720.00
$131,000.00
$79,280.00
 STRONG KNOT, INC
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31,2015

Revenue Retained Earnings, Jan 1

Service Revenue Earned $160,000.00 Add: Net Income
Subtotal
Total Revenue $160,000.00 Less:Dividends(Declared
Expenses Retained Earnings, Dec 3
Insurance Expense $1,800.00
Office Rent Expense $18,000.00
Supplies Expense $1,200.00
Salary Expense $96,000.00
Repair And Maintenance Expense $1,700.00
Internet Expense $2,800.00
Travel Expense $6,600.00
Miscellaneous Expense $2,100.00
Depreciation Expense:Automobile $4,000.00
Depreciation Expense:Equipment $3,000.00 $137,200.00
Income Before Income Taxes $22,800.00
Income Taxes Expense $4,000.00
Net Income $18,800.00
 STRONG KNOW, INC
STATEMENT OF RETAINED EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 2015

Retained Earnings, Jan 1 $17,500.00

Add: Net Income $18,800.00
Subtotal $36,300.00
Less:Dividends(Declared) $3,000.00
Retained Earnings, Dec 31 $33,300.00
 STRONG KNOT, INC
BALANCE SHEET
December 31- 2015
Assets Liabilities & Equity
Current Assets Liablities
Cash $15,400.00 Account Payable $5,200.00
Supplies $900.00 Notes Payable $33,000.00
Account Receivable $8,200.00 Salaries Payable $900.00
Unexpired Insurance $3,000.00 Unearned Revenue $3,500.00
Prepaid Rent $800.00 Income Taxes Payable $400.00

Total CA $28,300.00 Total Liabilities $43,000.00

Fixed Assets Equity
Automobile $37,000.00
Less: Accumulated Depreciation $12,000.00 Capital Stock $3,000.00
Total Automobiles $25,000.00
Equipment And Music $39,000.00
Less: Accumulated Depreciation Equip $13,000.00
Total Equipment And Music $26,000.00 Retained Earnings $33,300.00
Total FA(Net Furniture&Fixtures) $51,000.00 Total Equity $36,300.00
Total Assets $79,300.00 Total Liabilities&Equity $79,300.00
5200+NP+900+3500+400+3000+33300=79300
Consider NP=X
X=-5200-900-3500-400-3000-33300+79300
X=33,000
 Total Product A Product B
Sales $234,000.00 $100,000.00 $90,000.00
Variable Costs $159,000.00 $76,000.00 $48,000.00
Contribution Margin $75,000.00 $24,000.00 $42,000.00
Avoidable Fixed Costs $30,000.00 $9,000.00 $18,000.00
Unavoidable Fixed Costs $22,700.00 $6,000.00 $9,000.00
Operating Income(Less) $22,300.00 $9,000.00 $15,000.00

Total After Change Product A Product B

Sales $280,000.00 $100,000.00 $180,000.00
Variable Costs $172,000.00 $76,000.00 $96,000.00
Contribution Margin $108,000.00 $24,000.00 $84,000.00
Avoidable Fixed Costs $30,000.00 $9,000.00 $18,000.00
Unavoidable Fixed Costs $22,700.00 $6,000.00 $9,000.00
Operating Income(Less) $55,300.00 $9,000.00 $57,000.00

If Cesar Company Drops Product C, and Doubles Production and Sales of Product B , then Operating income will increase fr
 Product C
$44,000.00
$35,000.00
$9,000.00
$3,000.00
$7,700.00
-$1,700.00

Product C
$0.00
$0.00
$0.00
$0.00
$7,700.00
-$7,700.00

n Operating income will increase from $22,300 to $55,300

 Units Produced Total Materials Cost (TVR)
100000 $600,000.00
110000 $660,000.00

Variable cost on a per unit basis remains constant

TVR/110000=6
TVR=660,000

So total costs to produce 110,000 units=TVR+TFC=$660,000+$700,000 = $1360000

TVC/U TFC TFC/U
$6.00 $700,000.00 $7.00
$6.00 $700,000.00 $6.36
 The Special Sales Order
Howe Tie Company

Without Special Order

18000 units
Sales 234,000

Less:Variable Expenses
Direct Materials $10,800.00
Direct Manufacturing Labor $54,000.00
Variable Manufacturng Overhead $21,600.00
Variable Selling $14,400.00
Total Variable Expenses $100,800.00
Contribution Margin $133,200.00
Less:Fixed Expenses
Fixed Selling $20,340.00
Fixed Manufacturing Overhead $28,800.00
Total Fixed Expenses $49,140.00
Operating Income $84,060.00

Yes the order should be accepted since there are $800 additional operating income
Effect Of Special Order With Special Order

2000 units 2000 units

$12,000.00 $246,000.00

$1,200.00 $12,000.00

$6,000.00 $60,000.00

$2,400.00 $24,000
$1,600.00 $16,000.00
$11,200.00 $112,000.00
$800.00 $134,000

$20,340
28800

49140
$84,860