Bab 3-Income Statement:
Using the data presented below:
Aspen Industries
Income Statement
For the Years Ended December 31,2004 and 2003
2004
2003
Sales
285,000
190,000
Cost of Goods Sold
215,000
143,000
$
$
Gross Profit
70,000.00
47,000.00
Operating Expenses
Variable Expenses
28,500
19,000
Fixed Expenses
21,000
20,000
Depreciation
10,000
4,500
$
$
Total
59,500.00
43,500.00
Earnings Before Interest and Taxes
Interest Expenses
Earnings Before Taxes
10,500
6,100
4,400
$
1,540.00
$
2,860.00
Taxes
Net Income
Notes:
Tax Rate
Payout Ratio
Dividends
3,500
3,000
500
$
175.00
$
325.00
35%
30%
858
Aspen Industries
Balance Sheet
As of December 31,2004 and 2003
Assets
Cash
Accounts Receivable
Inventories
Total Current Assets
Land
Buildings and Equipment
Accumulated Deprecation
Total Fixed Assets
2004
2003
4,000
16,000
42,500
9,000
12,500
29,000
$
62,500.00
26,000
100,000
-38,000
$
88,000.00
$
50,500.00
20,000
70,000
-28,000
$
62,000.00
Total Assets
Liabilities and Owner's Equity
Accounts Payable
Short-term Bank Notes
Total Current Liabilities
Long-term Debt
Common Stock
Retained Earnings
Total Liabilities and Owner's
Equity
$
150,500.00
22,298
47,000
$
69,298.00
22,950
31,500
26,752
$
150,500.00
$
112,500.00
10,500
17,000
$
27,500.00
28,750
31,500
24,750
$
112,500.00
a. Recreate the income statement and balance sheet using formulas whenever
possible. Each statement should be on a separate worksheet. Try to duplicate the
formulating exactly.
b. Suppose that sales were $320,00 in 2004 rather than $285,00. What is the 2004
net income and retained earnings?
c. Undo the changes form part b, and change the tax rate to 40%. What is the 2004
net income and retained earnings?