Assets Liabilities

Cars Acc. Dep. Cars Bonds

220,000 80,000 100,000
60,000
140,000

Computers Acc. Dep. Computers Acc. Payable

150,000 60,000 90,000
45,000 5,400 380,000
105,000 23,400 250,000
25,200 220,000
67,200
Patent
75,000
8,333 Mortgate Payable
66,667 200,000
11,397
12,764
MI Prep. Op. Exp. 175,839
110,000 5,000

230,000 C.P.M.P
11,397
11,397
Acc. Recivables AFUA 12,764
50,000 2,000 12,764
800,000 25,000
400,000 5,000
25,000 39,250
5,000 21,250
5,000
425,000

Cash Equipment
325,000 200,000
250,000
5,000
70,000
1,000,000 Acc. Dep. Equipment
1,200,000 18,000
1,000
 29,000
20,000
35,397
400,000
5,000
8,000
2,551,603
Liabilities Equity

Discounts on Bonds Purchases Sales Revenue

9,899 505 380,000 800,000
530
8,864
Operating Exp. Dep. Exp. Comp.
70,000 5,400
Dividends Payable 10,000 25,200
29,000 80,000 30,600
29,000
149,950 Dividends Dep. Exp. Equipment
105,000 149,950 18,000
254,950 105,000

Operating Exp. Pay. Interest Exp. Mortgage Bad Debt Exp.

10,000 24,000 39,250

Dep Exp. Cars Amort. Exp. Patent

60,000 8,333

Amort. Of Discount Bonds

1,035 Interest Exp. Bonds
9,035
 Equity

Sales Revenue

Dep. Exp. Comp. Loss on Sales of Comp.

1,600

Dep. Exp. Equipment

Bad Debt Exp.

Amort. Exp. Patent

Dep. Table Computers

Dep. Exp. Comp. Acc. Dep. Comp.Book Value

1-Jan-04 45,000
31-Dec-04 18,000 18,000 27,000
1-Jul-05 5,400 23,400 21,600

Double-Declining-Balance Metho 40% 5,400

Mortgage

$35,396.83

Date Int. Exp. Cash Paid Principal Paid Book Value

1-Jan-05 200000.00
31-Dec-05 24000.00 35396.83 11396.83 188603.17
31-Dec-06 22632.38 35396.83 12764.45 175838.71

Bonds

Date Interest Exp. Cash Paid Amort. of DiscountDiscount on Bonds

1-Jan-05 9,899
30-Jun-05 4,505 4,000 505 9,394
31-Dec-05 4530.3025 4000 530.3025 8,864
9035.3525 8000 1035.3525
Acc. Dep. Comp. 23,400
Cash 20,000
Loss on sale of Comp. 1,600
Computers 45,000

Carrying Value of Bonds

90,101
90,606
91,136
 Shareholder's Equity

Ord. Shares Paid-in Cap. Ord Pref. Shares Paid-in Cap. Pref Ord. Shares Dist.
200,000 100,000 50,000
400,000 600,000
1,000,000 200,000

600,000 700,000 1,050,000 200,000 0

 Shareholder's Equity

R.E G.Reserve Treasury Stock Ord. Total Comments

196,899 32,000 578,899 Opening
1,000,000 Issuing Ord. Shares
1,200,000 Issuing Pref. Shares
-1,000 -1,000 Redemption of Ord. Shares
-149,950 -149,950 Issuing dividends on ordinary shares
-105,000 -105,000 Issuing dividends on prefered shares
269,181 269,181 Net Income
211,130 32,000 -1,000 2,792,130
 Outstanding Ord. Shares Outstanding Pref. Shares
100000 5000
200000 100000
-100 105000
299900
dinary shares
efered shares
 Income Statement
1 Jan - 31dec 2005

Revenues:
Sales revenue 800,000
Net Sales 800,000
COGS:
Beg. Inv. 110,000
Purchases 380,000
COGP 380000
COGAFS 490000
Less Ending Inv. 230,000
COGS 260000
Gross Profit 540000

Operating expanses:
Op. Exp. 80,000
Dep. Exp. Comp. 30,600
Dep. Exp. Cars 60,000
Dep. Exp. Eq. 18,000
Patent Amort. Exp. 8,333
Bad debt Exp. 39,250
Total op. exp. 236183.33
Op. Income 303816.67

Non-Operating Expanses:
Interest Exp. Mortgage 24000.00
Interest Exp. Bonds 9,035
Loss on Sales of Comp. 1,600
Total Non-Op. Exp. 34635.35
Net Income 269181.31
 Balance Sheet
31-Dec-05
Assets
Non-Current Assets
PPE:
Cars 220,000
Less Acc Dep Cars 140,000 80000
Computers 105,000
Less Acc Dep Comp. 67,200 37800
Equipment 200,000
Less Acc. Dep. Eq. 18,000 182000
Total PPE 299800
Intangible Assets:
Patent 66,667
Total Long-Term Assets 366,467

Current Assets
Prep. Op. Exp. 5,000
M.I. 230,000
Acc. Rec. 425,000
Less AFUA 21,250 403,750
Cash 2,551,603
Total Current Assets 3,190,353
Total Assets 3556820

Shareholders' Eq. & Liabilities

Shareholders' Eq.:
Share Capital:
Ord. Shares 600,000
Paid-in Cap. Ord. 700,000
Pref. Shares 1,050,000
Paid-in Cap. Pref 200,000
Total Share Capital. 2550000
R.E. 211,130
General Reserve 32,000
Treasury Stock -1,000
Total Shareholders' Equity 2792130.3142

Liabilities:
Non-Current Liabilities:
Bonds 100,000
Less: Disc. On Bonds 8,864 91136.353
Mortgage Payable 175838.71
Total Non-Current Liabilities 266975.07
Current Liabilities:
Acc. Payable 220,000
Dividends payable 254,950
Op. Exp. Pay. 10,000
C.P.M.P 12764.45
Total Current Liabilities 497714.4528
Total Liabilities 764689.52
Total Shareholders' Eq. & Liabilities 3556820
Direct
Cash flows from operating activities
Cash recived from customers $ 99,450 Revenue - Δ Account Receivable – Write-off + Δ Adv.
Cash received from dividends $ 300
Cash payed to MI suppliers $ (30,000) C.O.G.S + Δ Merchandising Inv. – Δ Accounts Payable
Cash payed for Operating Expanses $ (9,000) Operating Exp.(Excluding Dep. Exp) + Δ Prepaid Exp. –
Cash payed for Tax $ (3,000) Income Tax Exp. - Δ Income tax payable
Cash payaed for Interest $ (4,500) Interest Expense - Δ Interest Payable
Net cash provided by operating activites $ 53,250

Indirect
Cash flows from operating activites
Net income $ 36,550
Add: Equipment Depriciation $ 1,500
Add: Loss from Equipment sale $ 400
Less: Gain from selling securities $ (200)
Add: Bed debt exp $ 550
Less: Icrease in accountrs recivable $ (2,350)
Less: Write-off Acc. Recivable $ (200)
Add: Decrise in M.I $ 5,000
Add: Decrise in Prepaid expances $ 2,000
Add: Increase in Accounts Payable $ 10,000
Add: Increase in Adv. From Customers $ 2,000
Less: Decrise in Tax payable $ (1,000)
Less: Decrise in Op. Exp. Payable $ (1,000)
Net cash provided by operating activites $ 53,250

Cash flows from investing activites

Purchase of Building $ (12,000) Equipment
Purchase of Equipment $ (20,000) 25000
Sale of Equipment $ 7,600 10000
Cash received fron investment $ 2,200 X
Net cash used by investing activites $ (22,200) 20000
35000
Cash flow from financing activites
Principal payed, Loan paid $ (15,000)
Payment of dividends $ (14,450) RE
Cash recieved from issuance of ord. shares $ 60,000 28000
Cash payed for purchases of own ord.shares $ (2,000) 36550
Net cash provided by financing activities $28,550.00 8000
19450
Net increase in cash $59,600 37100
Cash at the beginning of period $107,600
Cash at end of period $167,200
able – Write-off + Δ Adv. From customer AFUA
1000
nv. – Δ Accounts Payable
ep. Exp) + Δ Prepaid Exp. – Δ Op. Exp. Payable 200
tax payable Write off 550
1350

Equipment Dep. Cash 7600

4000 Equip. Dep 2000
1500 Loss on Sales 400
X Equipment 10000
2000
3500