Final Solution Week II - Chemalite

Chemalite (A) Group 8 1080644 Jesper van Engelen 1688421 Abdulhadi Abulahab 1!!"0!" Joe# Appelman 1!21!12 $i%ue $ i%ue &an 10'"!2 $imone Cammel

Chemalite Case (A) QUESTIONS: 1. Prepare the post-produtio! "i!a!ial Stateme!ts (Period #a! $ % #u!e &' $''&) - Ope!i! *ala!e - I!ome Stateme!t - E!di! *ala!e $. Prepare the seo!d hal+ ,ear produtio! "i!a!ial Stateme!ts (Period #ul, 1 % eemer &1 $''&) - I!ome Stateme!t - E!di! *ala!e

Chemalite Ope!i! *ala!e $ #a!. $''&

0iailities  O2!er3s E4uit,

Assets

Cash

375,000

Patent

125,000 Common Stock

500,000

500,000

500,000

Note: Follow the Cash

Chemalite I!ome Stateme!t 15$''& Revenues

0

Expenses

0

Net Income

0

In this (pe!po"uction# peio" 1$5,000 is pai" %o& ! 7,500 'ea' %ees, ! )2,500 *ui'"in the machine - 75,000 invento+ hese shou'" *e teate" as i!/estme!ts (not losses#

Chemalite E!di! *ala!e #u!e &' $''& 0iailities  O2!er3s E4uit,

Assets

230,000 Cash Capita'i-e" .ea' 7,500 75,000 Invento+ )2,500 Common Stock /ixe" ssets 125,000 Retaine" Eanins Patent

500,000 0

500,000

500,000

Chemalite Stateme!t o+ Cash "lo2s 15$''& Cash "lo2s +rom:

Operatio!s: ! Puchase invento+

75,000

I!/esti!: - Puchase machine+ - .ea' Costs

)2,500 7,500

"i!a!i!: ! Sa'e Common Stock

375,000

Incease in Cash Cash ein

230,000 0

Chema'ite Income Statement 22003 7e/e!ues E
75$,500 702,)25 7,500 22,500 90,000 350,000 1:5,000 23,750 750 10,)25 12,500 51,975

Chema'ite En"in a'ance 8ec4 31, 2003 0iailities  O2!er3s E4uit,

Assets

Cash Receiva*'es Invento+

113,000 ):,500 55,000

/ixe" ssets (net# 201,975 Common Stock 112,500 Retaine" Eanins Patent

500,000 51,975

551,975

500,000

Chemalite Stateme!t o+ Cash "lo2s $5$''& Cash "lo2s +rom:

I!diret 6ethod

Operations: ! Net I!ome ! 8ep4  mot ! Incease in Receiva*'es ! 8ecease in Invento+

I!/esti! "i!a!i! Incease (8ecease# in Cash Cash ein Cash En"in

51,975 23,125 ):,500 20,000 1$2,500 0,00 117,000 230,000 113,000

to Retained  Earnings

Chemalite (*) Stateme!t o+ Cash "lo2 % I!diret 6ethod *ei! a!d E!d olum!s to alulate o!l, +or *ala!e sheet aou!ts !ot I!ome Statteme!ts aou!ts (lie Net I!ome epreiatio!)

Chemalite (*) Dai! o! Sales o+ "i
Cash

66

achines (histoica' va'ue#  ccum4 8epeciation (;un < ;u'# ook va'ue Dai! o! Sale o+ 6ahi!es (I!l. i! I!ome Stateme!t Net I!ome ut it is Not a Cash "lo2 item so tae out)

6

Chemalite (*)

u+ PPE ('an" 250 an" *ui'"in )00# %o 44444444444444 444444444444444444@ pai" = 4444444444444 P'us ne machine = 444444444444 ota' Investin = 4444444444444 PPE Popet+ P'ant an" EAuipement# = 4444444444 - Ne machine 444444 - PPE 444444444

ein 444444444444444 (so'" 444444444 ith a ain o% 444444444# En" 44444444444 (444444444444444 B 444444444444444#