The following is the December 31, 2003 balance sheet for the Epics Corporation.
(10 points)
Assets Liabilities Cash $ 70,000 Accounts Payable $ 100,000 Accounts Receivable 150,000 Notes Payable 120,000 Inventory 280,000 Bonds Payable 300,000 Total Current Assets $ 500,000 Total Liabilities $ 520,000 Plant and Equipment $1,250,000 Equity Less: Accum. Deprec. 250,000 Common Stock 300,000 Net plant and Equipment $1,000,000 Paid In Capital 200,000 Retained Earnings 480,000 Total Assets $1,500,000 Total Equity $ 980,000 Total Liab. & Equity $1,500,000
Sales for 2003 were $2,000,000, with the cost of goods sold being 55% of sales. Depreciation expense was 10% of the gross plant and equipment at the beginning of the year. Interest expense was 9% on the notes payable and 11% on the bonds payable. Selling and administrative expenses were $200,000 and the firm’s tax rate is 40%.
Prepare an income statement.