YARDASTICK INTERNATIONAL COLLEGE

SCOOL OF POST GRADUATE STUDIES

DEPARTMENT OF BUSINESS ADMINSTRATION

Financial and Managerial Accounting

SUBMMITTED BY ID NO

1. Gashaw Demelash ------------------- MBA(1)184/14B

2. Banchi Demissie---------------------- MBA(1)021/14B

3. Meseret Fikadu ----------------------- MBA(1)118/14B

4. Ziad Temam-------------------------- MBA(1)089/14B

5. Abebe Getenet-------------------------MBA(1)040/14B

6. TamruAlemayehu---------------------MBA(1)041/14B

7 .Tigist Aleligne ------------------------- MBA(1)103/14B

SUBMITED TO Ass.Prof KIRUBEL ASEGDEW

1
ADDIS ABABA ETHIOPIA

MAY 2022

1. The following information relates to highlight company. Prepare Financial Statement

Analysis as required below.
2. Required: Prepare the following analysis.
a) Ratio analysis with detailed interpretation of the results and internal and external
comparisons.
Highlight Company
Statement of Profit or
loss
for Year Ending
December 31, 2019-2021

2021 2020 2019

Sales 7,035,600.00 6,034,000.00 3,432,000.00

Cost of goods sold 5,875,992.00 5,528,000.00 2,864,000.00
Gross profit 1,159,608.00 506,000.00 568,000.00
Total operating
666,960.00 636,948.00 377,572.00
expenses
EBIT 492,648.00 (130,948.00) 190,428.00
Interest expense 70,008.00 136,012.00 43,828.00
EBT 422,640.00 (266,960.00) 146,600.00
Taxes (40%) 169,056.00 (106,784.00) 58,640.00
Net income 253,584.00 (160,176.00) 87,960.00
Highlight Company
Statement of Positions
December 31, 2019-2021
2021 2020 2019
Cash 85,632.00 7,282.00 57,600.00
Accounts receivable 878,000.00 632,160.00 351,200.00
Inventories 1,716,480.00 1,287,360.00 715,200.00
Total current assets 2,680,112.00 1,926,802.00 1,124,000.00
Gross fixed assets 1,197,160.00 1,202,950.00 491,000.00
Less accumulated
380,120.00 263,160.00 146,200.00
depreciation
Net fixed assets 817,040.00 939,790.00 344,800.00
2
Total assets 3,497,152.00 2,866,592.00 1,468,800.00
LIABILITIES AND
EQUITY
Accounts payable 436,800.00 524,160.00 145,600.00
Notes payable 300,000.00 636,808.00 200,000.00
Accruals 408,000.00 489,600.00 136,000.00
Total current liabilities 1,144,800.00 1,650,568.00 481,600.00
Long-term debt 400,000.00 723,432.00 323,432.00
1,544,800.00 2,374,000.00 805,032.00
Common stock 1,721,176.00 460,000.00 460,000.00
Retained earnings 231,176.00 32,592.00 203,768.00
Total equity 1,952,352.00 492,592.00 663,768.00
Total liabilities and
3,497,152.00 2,866,592.00 1,468,800.00
equity

Industry Average for

three years

i. Current Ratio 2.74

ii. Acid-Test (Quick) 1.00
iii. Debt-to-Equity 1.33
iv. Debt-to-Total-Assets 0.50
v. Total Capitalization 0.35
vi. Interest Coverage 4.25
vii. Receivable Turnover 9.00
viii. Average Collection
40.55
Period
ix. Inventory Turnover 6.10
x. Total Asset Turnover 2.60
xi. Gross Profit Margin 0.17
xii. Net Profit Margin 0.03
xiii. Return on assets 9.10
xiv. Return on Equity 0.18
xv. Return on Investment
(Du Pont Approach)
xvi. Return on Equity (Du
Pont Approach)
b) Common-size Analysis
c) Index Analyses

3
1a. Ratio Analysis with detailed interpretation

Ser Comparison from Internally Comparisons

. change on previous Ratio
Interpretation
No. year balance 2021 2020 2019
s
Liquidity Ratio
Current
Asset/Current
1 Current Ratio Liability 2.34 1.17 2.33
(Current Asset -
Acid - Test (Quick Inventory)/Current
2 Ratio) Liability 0.84 0.39 0.85

Financial Leverage Ratio

Total Debt
/Shareholders'
3 Debt to Equity Equities 0.79 4.82 1.21
Total Debt /Total
4 Debt to Total Assets Asset 0.44 0.83 0.55
Long Term Debt/
Total
Capitalization(LT-
debt Equity): Total
Capitalization =
Long Term Debt +
5 Total Capitalization Equity) 0.17 0.59 0.33

4
 Coverage Ratio
EBIT/ Interest
6 Interest Coverage Charges 7.04 (0.96) 4.34

Activity Ratio
Annual Net Credit
7 Receivable Turnover Sales/Receivables 8.01 9.55 9.77
Days in the Year
Average Collection /Receivable
8 Period Turnover 45.55 38.24 37.35
Cost of Goods
9 Inventory Turnover Sold/Inventory 3.42 4.29 4.00
Net Sales / Total
10 Total Asset Turnover Assets 2.01 2.10 2.34

Profitability Ratio
Gross Profit / Net 16.55
11 Gross profit Margin Sales 16.48% 8.39% %
Net Profit After
12 Net Profit Margin Taxes / Net Sales 3.60% -2.65% 2.56%
Net profit After
13 Return on assets Taxes / Total Assets 7.25% -5.59% 5.99%
Net profit After
Taxes/ - 13.25
14 Return on Equity Shareholders' Equity 12.99% 32.52% %
Net profit Margin *
Total Asset
Turnover or
Return on Sales profitability *
15 Investment Asset efficiency 7.25% -5.59% 5.99%
Net Profit
margin*Total Asset
Turnover *Equity
Multiplier, (Equity
Multiplier = Total
Asset/Shareholders' - 13.25
16 Return on Equity Equity) 12.99% 32.52% %

5
 Externally
Comparisons
Ser Comparison from
2019 - Industr
. change on previous Ratio Interpretations
2021 y
No. year balance
Averag Averag
e e
Liquidity Ratio
Current
Asset/Current
1 Current Ratio Liability 1.95 2.74
(Current Asset -
Acid - Test (Quick Inventory)/Current
2 Ratio) Liability 0.69 1.00

Financial Leverage Ratio

Total Debt
/Shareholders'
3 Debt to Equity Equities 2.27 1.33
Total Debt /Total
4 Debt to Total Assets Asset 0.61 0.50
Long Term Debt/
Total
Capitalization(LT-
debt Equity): Total
Capitalization =
Long Term Debt +
5 Total Capitalization Equity) 0.36 0.35

Coverage Ratio
EBIT/ Interest
6 Interest Coverage Charges 3.47 4.25

Activity Ratio
Annual Net Credit
7 Receivable Turnover Sales/Receivables 9.11 9.00
Days in the Year
Average Collection /Receivable
8 Period Turnover 40.38 40.55
Cost of Goods
9 Inventory Turnover Sold/Inventory 3.91 6.10
Net Sales / Total
10 Total Asset Turnover Assets 2.15 2.60

Profitability Ratio

6
 Gross Profit / Net
11 Gross profit Margin Sales 0.14 0.17
Net Profit After
12 Net Profit Margin Taxes / Net Sales 0.01 0.03
Net profit After
13 Return on assets Taxes / Total Assets 0.03 9.10
Net profit After
Taxes/
14 Return on Equity Shareholders' Equity (0.02) 0.18
Net profit Margin *
Total Asset
Turnover or Sales
Return on profitability * Asset
15 Investment efficiency 0.03
Net Profit
margin*Total Asset
Turnover *Equity
Multiplier, (Equity
Multiplier = Total
Asset/Shareholders'
16 Return on Equity Equity) (0.02)

1a. Ratio Analysis with Internally comparison interpretation

Ser
. Ratio Internally Comparison from change on previous year balance
No.

1- Current Ratio

In 2019 year, The Company has 2.33 times more Current

Asset than Current Liabilities to cover its debt. But the good
current ratio is between 1.2 to 2. Which means there is ideal
current asset which can be invested in short term period.
In 2020, The Business has 1.17 Current ration which is
apparently in a better position to pay off its liabilities. And
compared to 2019 year the company reduce the ideal
Current Asset which good.
It is pretty Clear that, the Company, in 2021 year compared
to the previous years, is more liquid and is apparently in a
better position to pay off its liabilities. However, there is
More ideal Current asset in the business. Which lead

Acid - Test (Quick

2- Ratio)

7
 In 2019 year, the Company has $ 0.85 of current Assets for
every $ 1 0f Current Liabilities. This indicates the company
has a shortage of money on hand to pay its obligations in the
coming 12 months.
In 2020 year, the Company has $ 0.39 of current Assets for
every $ 1 0f Current Liabilities. This indicates the company
has taken on too much debt.
In 2021 year, the Company has $ 0.84 of current Assets for
every $ 1 0f Current Liabilities. This indicates the company
has a shortage of money on hand to pay its obligations in the
coming 12 months too.
The Companies quick ratio is below $1 this shows Current
Assets doesn’t cover short term obligation in the coming 12
months. However Current ratio is above $2 which is
excessive than expected $2. This is due to that more
inventory is available, so the company need to sale the stock
or give it for short term borrowing.

3- Debt to Equity

In 2019 Year, the company has 1.21 debt to equity ratio. The
ratio above 1 indicates more debt than equity
In 2020 Year, The company has 4.82 debt to equity ratio, this
indicates the company is financed more by debt than equity,
which leads to higher financial risk.
In 2021 year, the company has 0.79 debt to equity ratio, this
is less financial risk than last two year. Which is $ 0.79 debt
for every $1 in equity.

4- Debt to Total Assets

In 2019 Year ,The debt to total assets is 0.55, which means

55% of a business's asset owned by creditors.
In 2020 Year, The debt to total assets is 0.83, this indicates
the business asset is more owned by creditors compared to
2019 year.
In 2021 Year, the company has 0.44 debt to equity ratio,
indicates that the business is more owned by Shareholders,
compared to last two years.

5- Total Capitalization

In 2019 Year, The Company's Capitalization is 33%, which

company has financed from long term debt's and from share
holder equity.
In 2020 Year, The Company's Capitalization is 59% , the
8
 company has more financed by long term debt's and from
share holder equity compared to 2019 Year.
In 2021 Year, The Companies Capitalization is 17%, the
company has less financed by long term debt's and from
share holder equity compared to the previous two years.

6- Interest Coverage

In 2019 Year, The company Interest coverage ratio is 4.34.

In 2020 Year, the company interest coverage ratio is (0.96).
This indicates that in 2020, the company has not any
confidence to cover interest payment on its outstanding
debt. Which is negative.
In 2021 Year, The Company's interest coverage ratio 7.04
shows that the more self confident, to pay off its debt
compared to the last period. The higher the interest
coverage ratio, the more poised it is to pay its debt.

7- Receivable Turnover

In 2019 Year , the company’s receivable turnover is 9.77, The

higher the receivable turnover is the company’s customers
are paying on times and the company's is good at collecting.
In 2020 Year, the company’s receivable turnover is 9.55, less
than 2019, which is receivable are converted 9.55 times to
cash in a period.
In 2021 Year, the company’s receivable turnover is 8.01, less
than the previous two years. The less the ratio shows the
company’s customers are not paying on time and the
company’s is weak at collecting.

Average Collection
8- Period

In 2019 Year, the company’s client take 37.35 days to pay

their bills which is greater than 30 days. Average collection
period less than 30 days is Favorable.
In 2020 Year, the company’s client take 38.24 days to pay
their bills which is greater than 30 days. Average collection
period increase in this year compared with the last year.
In 2021 Year, the company’s Average Collection period is
more increase compared with the last two years. Which is
not favorable.

9- Inventory Turnover

9
 In 2019 Year, 4 times the company replace the inventory that
has sold.
In 2020 Year, 4.29 times the company replace the inventory
that has sold which is a little greater than 2019 year. This
means that the company able to sell goods quickly.
In 2021 Year, the company replace the inventory 3.42 that
has sold which is less than the previous two years. The low
ratio indicates weak Sales.

10- Total Asset Turnover

In 2019 Year, the total asset turnover ratio is 2.34. A higher

ratio is favorable because it implies the company is efficient
in generationg sales from its asset base.
In 2020 Year, the total asset turnover ratio is 2.10 . Which is
less ratio compared to the previous years, a lower ratio
indicates that a company is not using its assets efficiently.
In 2021 Year, the total asset turnover ratio is 2.01, Which is
less ratio compared to the last two previous years. The lower
total asset turnover ratio shows the company is not using its
assets efficiently.

11- Gross profit Margin

In 2019 Year, the company has 16.55% gross profit margin,

which is healthy, the company can make a reasonable profit
on sales.
In 2020 Year, The company has 8.39% gross profit margin,
decreased compared to the previous year. Shows that the
operation may not have efficiencies
In 2021 Year, the company has 16.48% gross profit margin,
which is health ratio, the company can make a reasonable
profit on Sales.

12- Net Profit Margin

In 2019 Year, The Net profit margin is 2.56%, which is net

profit generated from every $1 in sales in the current period.
It's clear the rate low. However, to say so it depends on the
industry and the structure of the business.
In 2020 Year, the Net profit margin is (2.65%), which is net
loss generated from every $1 in sales. Which is unfavorable.
In 2021 Year, the Net profit margin is 3.6%, This rate is better
compared to the previous two years.
10
13- Return on assets

In 2019 Year, The company has 5.99% ROI, this indicates

profitability of a company in relation to to its total Asset.
In 2020 Year, the company has (5.59%) ROI, this indicates
that the profitability of a company in relation to its total
Asset is loss.
In 2021 Year, the company has 7.25% ROI, is more efficient
and productive at managing its balance sheet and generate
profits compared to the last two years.

14- Return on Equity

In 2019 Year, the company has ROE of 13.25 %, which is

every dollar of a common stockholders equity generates
13.25% dollar of net income.
In 2020 Year, the company has ROE of (32.52%), which is
every dollar of a common stockholders equity generates a
loss of (32.52%).
In 2021 Year, the company has ROE is 12.99, which is every
dollar of a common stockholders equity generates 12.99%
dollar of net income. Its more better compared to the
previous year.

Return on
15- Investment
Return on Investment of the company is identical to return
on assets of the company.

16- Return on Equity

Return on Equity of the company is identical to return on
Equity of the company.

1a. Ratio Analysis with externally comparison interpretation

Ser Comparison from Externally Interpretations

. change on previous Comparisons

11
 2019 -
No. year balance 2021 Industry
Average Average
The company's current ratio is greater than 1,
just enough to pay down the short term
obligation but compared to the industry it is
1 Current Ratio 1.95 2.74 clear less
The company's quick ratio is low, compared to
the industry, which means the company can
raise 69 cents for every birr it owes over the
next 12 months. The company needs to owes
more money in short term liabilities than it
has in cash, potentially indicating that the Co.
Acid - Test (Quick cannot pay all of its bills in the coming
2 Ratio) 0.69 1.00 months,
Tells how much debt you have per $ 1 of
equity. The company's ratio is 2.27 birr of debt
for every $1.00 equity. It is more debt than
3 Debt to Equity 2.27 1.33 equity. which is not favorable
Shows the business more owned by creditors
compared to industry which is .61 is greater
4 Debt to Total Assets 0.61 0.50 than 0.50.
The companies total capitalization ratio is
almost the same to the industries which is
5 Total Capitalization 0.36 0.35 0.36.

6 Interest Coverage 3.47 4.25 The company’s interest coverage ratio is

The Companies Receivable Turnover ratio is
almost the same to industries, which is 9.11
times the companies receivable are converted
7 Receivable Turnover 9.11 9.00 to cash in a period.
The Companies Average collection period is
small less than to the industries, which is
40.38 days clients take to pay their bills, in
Average Collection average collection period is greater than 30
8 Period 40.38 40.55 days, not favorable
The company's ability to replace the inventory
that it has sold is low than the industry which
9 Inventory Turnover 3.91 6.10 indicates weak sales.
The company's total asset turnover ratio is
lower than the industries this shows that the
company is not using its assets efficiently to
10 Total Asset Turnover 2.15 2.60 produce sales.
The Company's gross profit margin is 0.14 % is
a lower margin than the industry which is
0.17%. May not have the efficiencies
11 Gross profit Margin 0.14 0.17 operation.

12
 The Company's net profit margin is 0.01% is a
lower margin than the industry which is
0.03%, generally the net profit margin is very
12 Net Profit Margin 0.01 0.03 low under 10%.
The Company's return on assets ratio is very
low compared to the industry. Low ROA
indicate low efficient and productive at
managing its balance sheet and generate
13 Return on assets 0.03 9.10 profits
Return on equity investor how effectively their
capital is being reinvested. The company's ROE
is negative and less than the industry this
indicated that every dollar of stockholders'
14 Return on Equity (0.02) 0.18 equity generates 0.02 dollar of net loss.
Return on Return on Investment of the company is
15 Investment 0.03 identical to return on assets of the company.
Return on Equity of the company is identical
16 Return on Equity (0.02) to return on Equity of the company.

1B
. Common Size Analysis

Comparis Regular (thousands ) Common - Size (%)

on from
Se
change
r. Interpretatio
on Ratio
No 2021 2020 2019 2021 2020 2019 ns
previous
.
year
balance
Common ((All and
Size Each
Analysis Balance
Sheet
Cash /Total 85,632.00 7,282.00 57,600.00 2.45 0.25 3.92
Account Asset )
Receivabl *100) & 878,000.0 632,160.0
e ((All & 0 0 351,200.00 25.11 22.05 23.91
each
Income 1,716,480. 1,287,360.
Inventory Statemen 00 00 715,200.00 49.08 44.91 48.69
Total t/
Current Revenue 2,680,112. 1,926,802. 1,124,000.0
Assets (Net 00 00 0 76.64 67.22 76.53
Net Fixed Sales)*10 23.36
Assets 0)) 817,040.0 939,790.0 344,800.00 32.78 23.47
13
 0 0

Total 3,497,152. 2,866,592. 1,468,800.0 100.0

Assets 00 00 0 100.00 100.00 0
LIABILITY
AND
EQUITY

Account 436,800.0 524,160.0

Payable 0 0 145,600.00 12.49 18.29 9.91

Notes 300,000.0 636,808.0

Payable 0 0 200,000.00 8.58 22.21 13.62

408,000.0 489,600.0
Accruals 0 0 136,000.00 11.67 17.08 9.26
Total
Current 1,144,800. 1,650,568.
Liability 00 00 481,600.00 32.74 57.58 32.79
Long
Term 400,000.0 723,432.0
Debts 0 0 323,432.00 11.44 25.24 22.02

1,952,352. 492,592.0
Equity 00 0 663,768.00 55.83 17.18 45.19
TOTAL
LIABILITY
AND 3,497,152. 2,866,592. 1,468,800.0 100.0
EQUITY 00 00 0 100.00 100.00 0

- - -

Regular (thousands ) Common - Size (%)

Ratio
2021 2020 2019 2021 2020 2019

3,432,000. 100.0
Sales ((All & 7,035,600.00 6,034,000.00 00 0 100.00 100.00
Cost of each
goods Income 2,864,000.
gold Statemen 5,875,992.00 5,528,000.00 00 83.52 91.61 83.45
Gross t/
profit Revenue 1,159,608.00 506,000.00 568,000.00 16.48 8.39 16.55
Total (Net
operating Sales)*10
expenses 0)) 666,960.00 636,948.00 377,572.00 9.48 10.56 11.00
EBIT (130,948.00) (2.17) 5.55
14
 492,648.00 190,428.00 7.00
Interest
expense 70,008.00 136,012.00 43,828.00 1.00 2.25 1.28

EBT 422,640.00 (266,960.00) 146,600.00 6.01 (4.42) 4.27

Taxes
(40%) 169,056.00 (106,784.00) 58,640.00 2.40 (1.77) 1.71
Net 253,584. 87,960 3.
(160,176.00) (2.65) 2.56
Income 00 .00 60

1C Index
. Analyses

Se Comparison 000 (thousands) Indexed (%)

r. from change Interpretati
Ratio
No on previous 2021 2020 2019 2021 2020 2019 ons
. year balance
ASSETS

100.
Cash 85,632.00 7,282.00 57,600.00 148.67 12.64 00

Account 878,000.0 632,160.0 351,200.0 1,524. 180.0 100.

Receivable 0 0 0 31 0 00

1,716,480 1,287,360 715,200.0 2,980. 180.0 100.

Inventory .00 .00 0 00 0 00
Total
Current ((Current 2,680,112 1,926,802 1,124,000 4,652. 171.4 100.
Assets Year - .00 .00 .00 97 2 00
Base
Net Fixed year 817,040.0 939,790.0 344,800.0 1,418. 272.5 100.
Assets )/Base 0 0 0 47 6 00
year
*100)+100 3,497,152 2,866,592 1,468,800 6,071. 195.1 100.
Total Assets .00 .00 .00 44 7 00

LIABILITY 100.
AND EQUITY - 00

Account 436,800.0 524,160.0 145,600.0 360.0 100.

Payable 0 0 0 758.33 0 00

Notes 300,000.0 636,808.0 200,000.0 318.4 100.

Payable 0 0 0 520.83 0 00
Accruals
15
 408,000.0 489,600.0 136,000.0 360.0 100.
0 0 0 708.33 0 00
Total
Current 1,144,800 1,650,568 481,600.0 1,987. 342.7 100.
Liability .00 .00 0 50 3 00

Long Term 400,000.0 723,432.0 323,432.0 223.6 100.

Debts 0 0 0 694.44 7 00

1,952,352 492,592.0 663,768.0 3,389. 100.

Equity .00 0 0 50 74.21 00
TOTAL
LIABILITY 3,497,152 2,866,592 1,468,800 6,071. 195.1 100.
AND EQUITY .00 .00 .00 44 7 00

- - - - - -

Regular (thousands ) Indexed (%)

Ratio
2021 2020 2019 2021 2020 2019

7,035,600 6,034,000 3,432,000

Sales .00 .00 .00 205.00 24.18 100

Cost of 5,875,992 5,528,000 2,864,000 193.0

goods gold .00 .00 .00 205.17 2 100

1,159,608 506,000.0 568,000.0

Gross profit .00 0 0 204.16 89.08 100
Total ((Current
operating Year - 666,960.0 636,948.0 377,572.0 168.7
expenses Base 0 0 0 176.64 0 100
year
)/Base 492,648.0 (130,948. 190,428.0 (68.77
EBIT year 0 00) 0 258.71 ) 100
*100)+100
Interest 136,012.0 310.3
expense 70,008.00 0 43,828.00 159.73 3 100

422,640.0 (266,960. 146,600.0 (182.1

EBT 0 00) 0 288.29 0) 100

169,056.0 (106,784. (182.1

Taxes (40%) 0 00) 58,640.00 288.29 0) 100
Net Income
16
 253,584.0 (160,176. (182.1
0 00) 87,960.00 288.29 0) 100

2. Consider the following account balances for the Soyer Corporation:

Soyer Corporation Beginning of 2011 End of 2011
Direct materials
65,000 34,000
inventory
Work-in-process
83,000 72,000
inventory
Finished goods inventory 123,000 102,000
Purchases of direct
128,000
materials
Direct manufacturing
106,000
labor
Manufacturing overhead
137,000
cost
Sales commission cost 62,000
Sales Revenue 600,000
Salary expense 34,000
Interest expense 10,250
Tax expense (30% of EBT)
I. Prepare schedule for
(a) Raw material used
(b) the cost of goods manufactured
(c) Cost of goods sold
II. Prepare the income statement for 2011 (don’t forget to compute Gross Profit, EBIT,
EBT and EAT)

Raw Material Used

Beginning Direct Materials Inv. 65,000.00

Add: Direct Materials Purchase 128,000.00

Raw Material Available for used 193,000.00

Deduct: Ending Direct Material Inventory 34,000.00

Raw Material Used 159,000.00

Cost of Goods Manufactured

17
 WIP Inventory Beginning 83,000.00

Add: Direct Manufacturing labor 106,000.00

Add: Manufacturing OH Cost 137,000.00

Add: Raw Material Used 159,000.00

Total WIP Inventory Available 485,000.00

Deduct: WIP Inventory 72,000.00

Cost of Goods Manufactured 413,000.00

Cost of Finished Goods

Finished Goods Inv. 123,000.00

Sales Commission Cost 62,000.00

WIP transferred to Finished Inv. 413,000.00

Finished Goods Inv. Available for Sales 598,000.00

Finished Goods Inv. 102,000.00

Cost of Finished Goods 496,000.00

Cost of Goods Sold

Cost of
Inventory Ending
Beg. Inv. Purchase Goods
Available Inv.
Sold

Direct Materials Inv. 65,000.00 65,000.00 34,000.00

WIP
18
 83,000.00 83,000.00 72,000.00

123,000.0 123,000.0 102,000.0

Finished Goods Inv. 0 0 0

128,000.0
Direct Materials Purchase 128,000.00 0

106,000.0
Direct Manufacturing labor 106,000.00 0

137,000.0
Manufacturing OH Cost 137,000.00 0

Sales Commission Cost 62,000.00 62,000.00

271,000 433,000. 704,000 496,000 208,000

Endings
.00 00 .00 .00 .00

Cost of Sales

Direct Material Inv. – Beginning 65,000.00

Add: WIP Beginning 83,000.00

Add: Finished Goods Inv.
Beginning 123,000.00
Add: Direct Materials
Purchase 128,000.00
Add: Direct Manufacturing
Labor 106,000.00

Add: Manufacturing OH 199,000.00

(208,000.0
Deduct: Ending Inventory 0)

496,000.0
Cost of Sales 0

Soyer Corporation
Income Statement
For the Year Ended 2011

Sales 600,000.00
Cost of goods gold 496,000.00
Gross profit 104,000.00
19
Total operating expenses 34,000.00
EBIT 70,000.00
Interest expense 10,250.00
EBT 59,750.00
Taxes (30%) 17,925.00
Net Income 41,825.00

20