…............

Company's
Income statement
$ $
Service revenue 1,044,000
(-)Supplies (9,000)

Gross profit 1,035,000

Other income
Interest revenue 6,000 6,000
1,041,000
Administrative expenses
Salaries expenses 312,000
Insurance expense 30,000
Utilities expense 82,500 (424,500)

Selling and distribution expenses

Advertising expenses 102,000 (102,000)

Finance and other expenses

Interest expense 16,500 (16,500)

Profit before tax 498,000

Tax
Net profit for the period 498,000
 Statement of retained earnings
Retained earnings Retained earnings Total
Retained earnings 390,000 390,000
Dividends (120,000) (120,000)
Profit for the year 498,000 498,000
768,000 768,000
 Balance sheet
Non current assets $ $ Owner's equity $ $
Land 669,000 Shares 2,460,000
Building 2,520,000 Retained earnings 768,000
Equipment 420,000 3,228,000
3,609,000
Current assets Current liabilities
Accounts receivables 750,000 Accounts receivables 480,000
Prepaid insurance 72,000 Notes payable 1,020,000
Cash 297,000 1,119,000 1,500,000

4,728,000 4,728,000
Accounts receivables

Prepaid insurance

receivables 1E+06
 May June July August September
Receipts
Cash sales (50% in month) 10000 25000 31000 27500 30000
Credit sales: (30% in 2nd month) 6000 15000 18600 16500
(20% in 3rd month) 4000 10000 12400

Total receipts 10000 31000 50000 56100 58900

Payments
Material purchases (75% in month) 11250 15000 22500 30000
Direct wages 4000 4000 4000 4000 4000
Production overheads 3000 3000 3000 3000 3000
Tax expenses 3000 3000 3000
Insurance expenses 10000

Total payments 7000 18250 35000 32500 40000

Net cash flow 3000 12750 15000 23600 18900
Opening cash balance 50000 65000 88600

Closing cash balance 65000 88600 107500

 July August September
Receipts
Cash sales (50% in month) 31,000 27,500 30,000
Credit sales: (30% in 2nd month) 15,000 18,600 16,500
(20% in 3rd month) 4,000 10,000 12,400

Total receipts 50,000 56,100 58,900

Payments
Material purchases (75% in month) 15,000 22,500 30,000
5,000 7,500

Total payments 15,000 27,500 37,500