The December 31, 2003 Balance Sheet For The

Question

The Following Is The December 31 2003 Balance Sheet For the Epics Cor 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 Less: Accum. Deprec. $250,000 Net Plant and Equipment $1,000,000 Equity Common Stock $300,000 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.

Dr. Jack HW Helper · Accepted Answer

The Following Is The December 31 2003 Balance Sheet For the Epics Cor Income Statement Preparation for Epics Corporation 2003 In this paper, we will develop a comprehensive income statement for Epics Corporation for the fiscal year 2003 based on the provided balance sheet data and additional financial details. The process involves calculating revenues, cost of goods sold, operating expenses, interest expenses, taxes, and ultimately net income. This structured approach not only ensures accuracy but also illustrates how various financial metrics interconnect to produce the final profitability figure for the year. Introduction The income statement, also known as the profit and loss statement, summarizes a company's revenues, expenses, and profits over a specific period. For Epics Corporation, a detailed analysis of the data provided reveals the company's operational efficiency and profitability for 2003. The key figures include total sales, cost of goods sold (COGS), operating expenses, interest expenses, and taxes. Accurate computation of these components facilitates a clear understanding of the company's financial health. Calculating Revenue and Cost of Goods Sold The revenue for 2003 is given as $2,000,000. The COGS is specified as 55% of sales, which equates to: $2,000,000 x 0.55 = $1,100,000 This figure represents the direct costs related to the production of goods sold during the period. Determining Gross Profit Gross profit is the difference between sales and COGS: Gross Profit = $2,000,000 - $1,100,000 = $900,000 This measure indicates the efficiency of production and sales operations before deducting operating expenses. Operating Expenses Selling and administrative expenses are provided as $200,000. These expenses encompass costs related to sales efforts, management, administrative functions, and other overhead activities necessary to support operations. Calculating Depreciation Expense Depreciation expense for 2003 is 10% of the gross plant and equipment at t

The December 31, 2003 Balance Sheet For The

The Following Is The December 31 2003 Balance Sheet For the Epics Cor

Paper For Above Instruction

Income Statement Preparation for Epics Corporation 2003

Introduction

Calculating Revenue and Cost of Goods Sold

Determining Gross Profit

Operating Expenses

Calculating Depreciation Expense

Interest Expenses

EBIT Calculation

Calculating Earnings Before Tax (EBT)

Tax Expenses and Net Income

Conclusion

References