THE SEABRIGHT MANUFACTURING COMPANY, INC.

INCOME STATEMENT
For Year Ended Desember 31, 20XY

Sales

Less cost of goods sold (see Schedule 1)

3,600,000
3,042,000

Gross profit on sales

558,000

Less operating expenses:

Freight and postage on sales

10,000

Sales Allowances

60,000

Miscellaneous Marketing Expenses

350,000

Discount on Sales

Marketing expenses (see Schedule 2)

50,000

Administrative expenses (see Schedule 3)

470,000
250,000

Net income from operations

720,000
$

(162,000)

Other income and expense items:

Royalties and dividends

Gain from sales of fixed assets

Interest earned

25,000

$
Interest and debt expenses

25,000
60,000

Net addition
Net income before estimated income tax

(35,000)
$

(197,000)

(197,000)

Less estimated income tax

Net income after estimated income tax

MPANY, INC.

Y
%
100.0
84.5
15.5

20.0
(4.5)

(1.0)
(5.5)
0.0
(5.5)

THE SEABRIGHT MANUFACTURING COMPANY, INC.

SCHEDULE 1
STATEMENT OF COST OF GOODS SOLD
September 30, 20XB
Direct materials:
Materials inventory, October 1, 20XA
Purchases
$ 500,000
Less puchases returns and allowances
Materials available for use
Less materials inventory, September 30, 20XB
Direct materials consumed

282,000

500,000
782,000
280,000
$

Direct labor
Factory overhead:
Indirect labor
Salaries
Payroll taxes
Miscelleneous Factory Overhead
Power
Heat
Light
Factory supplies
Depreciation - factory building
Depreciation - machinery
Repairs and maintenance
Patent expenses
Tools and dies expenses
Insurance on building and machinery
Patterns and Drawings Expenses
Total factory overhead
Total manufacturing costs
Add work in process inventory,October 1, 20XA

1,000,000

0
50,000
0
900,000

150,000
660,000
0
0
0
0
35,000
$
$

Less work in process inventory, September 30, 20XB

Cost of goods manufactured
Add inventory finished goods, October 1,

$
$

Less inventory finished goods, September 30, 20XB

Cost of goods sold

502,000

1,795,000
3,297,000
345,000
3,642,000
380,000
3,262,000
500,000
3,762,000
720,000
3,042,000

THE SEABRIGHT MANUFACTURING COMPANY, INC.

BALANCE SHEET
Desember 31, 20XY
ASSETS
Current assets:
Cash
Marketable securities
Notes receivable
Accounts receivable (net)
Inventories (materials, work in process, finished goods)
Prepaid insurances, taxes and mescellaneous expenses
Total current assets

Property, plant, and equipment:

Land
Buildings
$ 1,250,000
Office Furniture and Fixtures
26,000
Machinery and equipment
1,650,000
$ 2,926,000
Less accumulated depreciation
815,000
Total property, plant, and equipment
Total Assets

150,000

2,111,000

LIABILITIES
Current liabilities:
Accounts payable
Notes payable

Accrued Wages Payable

Accrued Interest on Mortgage

Estimated income taxes

Due on long-term debt
Total current liabilities

Long-term debt
Total liabilities

STOCKHOLDERS' EQUITY
Commen stock
Retained earnings

1,000,000
1,308,300

Total stockholders' equity

Total liabilities and stockholders' equity

NG COMPANY, INC.

ET
XY

234,000
21,800
444,000
1,380,000
35,500
2,115,300

2,261,000
4,376,300

100,000
500,000
50,000
5,000
655,000
750,000
1,405,000

UITY
2,308,300

3,713,300

THE SEABRIGHT MANUFACTURING COMPANY, INC.

BALANCE SHEET
Desember 31, 20XY
ASSETS
Current assets:
Cash
Marketable securities
Accounts receivable (net)
Inventories (materials, work in process, finished goods)
Prepaid insurances, taxes and mescellaneous expenses
Total current assets
Property, plant, and equipment:
Land
Buildings
$ 34,061,000
Machinery and equipment
###
$
###
Less accumulated depreciation 81,180,000
Total property, plant, and equipment
Total Assets

$ 2,890,000

###
$

LIABILITIES
Current liabilities:
Accounts payable
Accrued payroll, taxes, interst, etc.
Estimated income taxes
Due on lang-term debt
Total current liabilities

Long-term debt
Total liabilities

STOCKHOLDERS' EQUITY
Commen stock
Retained earnings

###
###

Total stockholders' equity

Total liabilities and stockholders' equity

NG COMPANY, INC.

ET
0XY

23,200,000
8,200,000
26,610,000
32,318,000
2,200,000
92,528,000

81,061,000
###

9,908,000
10,450,000
1,907,000
2,000,000
24,265,000
26,775,000
51,040,000

QUITY
122,549,000

###

THE SEABRIGHT MANUFACTURING COMPANY, INC.

INCOME STATEMENT
For Year Ended Desember 31, 20XY
%
Sales (4,500,000 units)

Less cost of goods sold (see Schedule 1)

###
###

Gross profit on sales

###
86.0

$ 34,650,000

14.0

11,137,500

4.5

$ 23,512,500

9.5

495,000

0.2

$ 24,007,500

9.7

10,642,500

4.3

$ 13,365,000

5.4

Less operating expenses:

Marketing expenses (see Schedule 2)

$ 5,800,000

Administrative expenses (see Schedule 3) 5,337,500

Net income from operations
Other income and expense items:
Royalties and dividends

$ 1,670,000

Gain from sales of fixed assets

120,000

$ 1,790,000
Interest and debt expenses
Net addition
Net income before estimated income tax
Less estimated income tax
Net income after estimated income tax

1,295,000

THE SEABRIGHT MANUFACTURING COMPANY, INC.

SCHEDULE 1
STATEMENT OF COST OF GOODS SOLD
For Year Ended Desember 31, 20XY
Direct materials:
Materials inventory, January 1, 20XY
Purchases
$
###
Less puchases returns and allowances
420,000
Materials available for use
Less materials inventory, December 31, 20XY
Direct materials consumed

###

###
###
###
$ 86,798,000

Direct labor
Factory overhead:
Indirect labor
Salaries
Payroll taxes
Power
Heat
Light
Factory supplies
Depreciation - factory building
Depreciation - machinery
Repairs and maintenance
Patent expenses
Tools and dies expenses
Insurance on building and machinery
Total factory overhead
Total manufacturing costs
Add work in process inventory, January 1, 200X

73,464,000

###
###
###
###
692,000
443,000
500,000
683,000
###
###
332,000
###
212,000
$
$

Less work in process inventory, December 31, 200X

Cost of goods manufactured
(4,430,000 units)
Add inventory finished goods, January1, 2
( 210,000 units)

$
Less inventory finished goods, Deceember 31, 200X
( 140,
Cost of goods sold
(4,500,000 units) $

39,159,000
###
23,380,000
222,801,000
13,032,000
###
9,661,000
219,430,000
6,580,000
###

THE SEABRIGHT MANUFACTURING COMPANY, INC.

SCHEDULE 2
MARKETING EXPENSES
For Year Ended Desember 31, 20XY
Sales salaries and commissions
Travels expenses
Payroll taxes
Advertising
Telecommunication
Entertainment
Donations and dues
Depreciation - furniture and fixtures
Stationery and office supplies
Postage
Total

$ 3,305,000
430,000
168,500
1,250,000
118,000
210,000
40,000
75,000
135,000
68,500
$
###

THE SEABRIGHT MANUFACTURING COMPANY, INC.

SCHEDULE 3
ADMINISTRATIVE EXPENSES
For Year Ended Desember 31, 20XY
Salaries - officers and executives
Salaries - general office employees
Travel expenses
Payroll taxes
Depreciation - furniture and fixtures
Stationery and office supplies
Telecommunication
Postage
Subscriptions, dues, and association activities
Donations
Total

3,362,000
772,500
224,500
175,000
62,000
54,500
78,000
36,500
47,500
525,000
###

The more prevalent ratios are:

1. Current Ratio =

Current Assets
Current Liabilities

2. Acid-Test ratio =

Current Assets - Inventories - Prepaid Items

Current Liabilities

92,528,000
24,265,000

3.813

58,010,000
24,265,000

Net Income (after estimated income tax)

Sales

3.b. Net Income (after estimated income tax) as a Percentage of Sales =

Gross Profit
Sales

5. Rate of Return on Capital Employed =

34,650,000
247,500,000

2.391

Net Income (before estimated income tax)

Sales

3.a. Net Income (before estimated income tax) as a Percentage of Sales =

4. Ratio of Gross Profit to Sales =

0.140

Net income (after estimated income tax)

Capital Employed (Total Assets)

13,365,000
173,589,000

0.077

24,007,500
247,500,000

13,365,000
247,500,000

0.097

0.054