Tutorial 2
Question 1
Assets
IJM CORPORATION
Financial Position for year ended 31 December 2015 and 2016
2016
2015
Current Assets
Cash
620,000
500,000 120,000
Account receivable
340,000
300,000 (40,000)
Inventory
250,000
200,000 (50,000)
Total Current assets
1,210,000
1,000,000 (100,000)
Property, Plant and Equipment
1,100,000
1,000,000 (100,000)
Less accumulated Depreciation
(259,000)
(140,000) (119,000)
Net Fixed Assets
841,000
860,000
TOTAL ASSETS
2,051,000
Fixed Assets
1,860,000
Liabilities and Owner's Equity
Current liabilities
Account payable
170,000
140,000 30,000
Notes payable
440,000
390,000 50,000
Total Current Liabilities
610,000
530,000
561,000
490,000 71,000
220,000
190,000 30,000
Long term liabilities
Long term debt
Owners’ Equity
Common stock (RM 1 par)
Capital Surplus
280,000
270,000 10,000
Retained Earnings
380,000
380,000
Total Owner’s equity
880,000
840,000
TOTAL LIABILITY AND OWNER'S
EQUITY
2,051,000
IJM CORPORATION
Income Statement as at 31 December 2016
Sales
1,000,000
Cost of goods sold
(700,000)
Administrive expenses
(100,000)
Depreciation
(119,000)
Earnings before Interest and Taxes
81,000
Interest Expenses
(80,000)
Taxable income
1,000
Taxes
-
Net Income
1,000
Dividend
1,000
1,860,000
You are required to prepare cash flow statement for IJM Corp.
Statement of Cash Flow
Net Income
1,000
Add: Depreciation
119,000
120,000
Cash Flows from operating activity
Increase in account receivable
(40,000)
Increase in Inventory
(50,000)
Increase in account payable
30,000
Increase in notes payable
50,000
Cash generated from Operating activities
(10,000)
110,000
Cash Flows from Investing activity
Property, Plant and Equipment
(100,000)
Cash Flows from Financing activities
Insurance of Common stock
30,000
Capital Surplus
10,000
Long term debt
71,000
Dividend
(1,000)
Cash Flows from Financing activities
110,000
Net increase in Cash
120,000
Cash at beginning
620,000
Cash at ending
500,000
Question 2
Dollars
Percentage of Sales
Sales
400,000
100.0%
Cost of goods sold
(150,000)
37.5%
Gross profits
250,000
62.5%
Administrative expenses
(30,000)
7.5%
Depreciation expenses
(20,000)
5.0%
Selling & marketing expenses
(40,000)
10.0%
Total operating expenses
(90,000)
22.5%
Operating income (EBIT)
$160,000
40.0%
Interest expense
(35,000)
8.8%
Earnings before taxes
$125,000
31.3%
Income tax
(40,000)
10.0%
Net Income
$ 85,000
21.3%
Operating expenses:
Earnings per share ($85,000 net income / 20,000 shares) $4.25
Dividends per share ($15,000 dividends / 20,000 shares) $0.75