Page 1 of 5 ABC WIDGET COMPANY

FINANCIAL STATEMENTS
YEAR - 1

BALANCE SHEET Month==>

1 2 3 4 5 6 7 8 9 10 11 12

Assets Note: Business started in month 1 no prior activity.

Current Assets
Cash $ _________ $ _________ $ _________ $ _________ $ _________ $ _________ $ _________ $ _________ $ _________ $ _________ $ _________ $ _________
Accounts Receivable $ 48,750 $ 50,625 $ 52,500 $ 48,750 $ 45,000 $ 48,750 $ 52,500 $ 54,375 $ 56,250 $ 52,500 $ 54,375 $ 56,250
Inventory $ 9,625 $ 10,063 $ 10,500 $ 9,625 $ 8,750 $ 9,625 $ 10,500 $ 10,938 $ 11,375 $ 10,500 $ 10,938 $ 11,375
Prepaid Insurance $ 12,000 $ 11,000 $ 10,000 $ 9,000 $ 8,000 $ 7,000 $ 6,000 $ 5,000 $ 4,000 $ 3,000 $ 2,000 $ 1,000

Total Current Assets $ _________ $ _________ $ _________ $ _________ $ _________ $ _________ $ _________ $ _________ $ _________ $ _________ $ _________ $ _________

Fixed Assets

Computers $ 24,000 $ 30,000 $ 42,000 $ 42,000 $ 42,000 $ 42,000 $ 50,000 $ 60,000 $ 60,000 $ 60,000 $ 60,000 $ 60,000
Accum Deprec $ (667) $ (1,500) $ (2,667) $ (3,833) $ (5,000) $ (6,167) $ (7,556) $ (9,222) $ (10,889) $ (12,556) $ (14,222) $ (15,889)
Net Computers $ 23,333 $ 28,500 $ 39,333 $ 38,167 $ 37,000 $ 35,833 $ 42,444 $ 50,778 $ 49,111 $ 47,444 $ 45,778 $ 44,111

Equipment $ 60,000 $ 76,000 $ 84,000 $ 84,000 $ 84,000 $ 84,000 $ 95,000 $ 100,000 $ 100,000 $ 100,000 $ 100,000 $ 100,000
Accum Deprec $ (1,000) $ (2,267) $ (3,667) $ (5,067) $ (6,467) $ (7,867) $ (9,450) $ (11,117) $ (12,783) $ (14,450) $ (16,117) $ (17,783)
Net Equipment $ 59,000 $ 73,733 $ 80,333 $ 78,933 $ 77,533 $ 76,133 $ 85,550 $ 88,883 $ 87,217 $ 85,550 $ 83,883 $ 82,217

Furniture & Fixtures $ 24,000 $ 30,000 $ 42,000 $ 42,000 $ 42,000 $ 42,000 $ 42,000 $ 42,000 $ 42,000 $ 42,000 $ 42,000 $ 42,000
Accum Deprec $ (286) $ (643) $ (1,143) $ (1,643) $ (2,143) $ (2,643) $ (3,143) $ (3,643) $ (4,143) $ (4,643) $ (5,143) $ (5,643)
Net Furniture & Fixtures $ 23,714 $ 29,357 $ 40,857 $ 40,357 $ 39,857 $ 39,357 $ 38,857 $ 38,357 $ 37,857 $ 37,357 $ 36,857 $ 36,357

Total Gross Fixed Assets $ 108,000 $ 136,000 $ 168,000 $ 168,000 $ 168,000 $ 168,000 $ 187,000 $ 202,000 $ 202,000 $ 202,000 $ 202,000 $ 202,000
Total Accum Depreciation $ (1,952) $ (4,410) $ (7,476) $ (10,543) $ (13,610) $ (16,676) $ (20,148) $ (23,982) $ (27,815) $ (31,648) $ (35,482) $ (39,315)
Net Fixed Assets $ 106,048 $ 131,590 $ 160,524 $ 157,457 $ 154,390 $ 151,324 $ 166,852 $ 178,018 $ 174,185 $ 170,352 $ 166,518 $ 162,685

Other Assets
Rent Deposit $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000
Investment in Capital Inc. $ - $ - $ - $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000
Patent $ 75,000 $ 75,000 $ 75,000 $ 75,000 $ 75,000 $ 75,000 $ 75,000 $ 75,000 $ 75,000 $ 75,000 $ 75,000 $ 75,000
Amort Patent $ (368) $ (735) $ (1,103) $ (1,471) $ (1,838) $ (2,206) $ (2,574) $ (2,941) $ (3,309) $ (3,676) $ (4,044) $ (4,412)
Total Other Assets $ 84,632 $ 84,265 $ 83,897 $ 108,529 $ 108,162 $ 107,794 $ 107,426 $ 107,059 $ 106,691 $ 106,324 $ 105,956 $ 105,588

Total Assets $ _________ $ _________ $ _________ $ _________ $ _________ $ _________ $ _________ $ _________ $ _________ $ _________ $ _________ $ _________
 Page 2 of 5 ABC WIDGET COMPANY
FINANCIAL STATEMENTS
YEAR - 1

Liabilities & Shareholders' Equity

Liabilities

Current Liabilities
Accounts Payable $ 39,188 $ 42,138 $ 43,957 $ 39,357 $ 34,097 $ 39,357 $ 44,016 $ 46,470 $ 49,240 $ 43,980 $ 46,750 $ 48,910
Accrued Payables $ 5,812 $ 5,362 $ 6,043 $ 5,643 $ 5,903 $ 5,643 $ 5,984 $ 6,030 $ 5,760 $ 6,020 $ 5,750 $ 6,090
Payroll Payable $ 15,000 $ 12,500 $ 15,000 $ 13,750 $ 15,000 $ 13,750 $ 15,000 $ 15,000 $ 13,750 $ 15,000 $ 13,750 $ 15,000
Payroll Taxes Payable $ 1,800 $ 1,500 $ 1,800 $ 1,650 $ 1,800 $ 1,650 $ 1,800 $ 1,800 $ 1,650 $ 1,800 $ 1,650 $ 1,800
Income Taxes Payable $ 4,083 $ 8,167 $ 10,860 $ 12,978 $ 12,198 $ 14,331 $ 17,275 $ 21,056 $ 26,782 $ 29,604 $ 34,371 $ 38,947
Line of Credit Loan $ 10,000 $ 12,500 $ 15,000 $ 7,500 $ 5,000 $ 2,500 $ - $ - $ - $ - $ - $ -
Short Term Portion of Debt $ 12,000 $ 12,000 $ 12,000 $ 12,000 $ 12,000 $ 12,000 $ 12,000 $ 12,000 $ 12,000 $ 12,000 $ 12,000 $ 12,000
Total Current Liabilities $ 87,883 $ 94,167 $ 104,660 $ 92,878 $ 85,998 $ 89,231 $ 96,075 $ 102,356 $ 109,182 $ 108,404 $ 114,271 $ 122,747

Long Term Liabilities

Deferred Income Taxes $ 250 $ 275 $ 300 $ 325 $ 350 $ 375 $ 400 $ 425 $ 450 $ 475 $ 500 $ 525
Long Term Debt $ 36,000 $ 35,000 $ 34,000 $ 33,000 $ 32,000 $ 31,000 $ 30,000 $ 29,000 $ 28,000 $ 27,000 $ 26,000 $ 25,000
Short Term Portion of LTD $ (12,000) $ (12,000) $ (12,000) $ (12,000) $ (12,000) $ (12,000) $ (12,000) $ (12,000) $ (12,000) $ (12,000) $ (12,000) $ (12,000)
Net Long Term Liabilities $ 24,250 $ 23,275 $ 22,300 $ 21,325 $ 20,350 $ 19,375 $ 18,400 $ 17,425 $ 16,450 $ 15,475 $ 14,500 $ 13,525

Total Liabilities $ 112,133 $ 117,442 $ 126,960 $ 114,203 $ 106,348 $ 108,606 $ 114,475 $ 119,781 $ 125,632 $ 123,879 $ 128,771 $ 136,272

Shareholders' Equity
Common Stock $ 10,000 $ 10,000 $ 11,000 $ 11,000 $ 11,000 $ 11,000 $ 11,000 $ 11,000 $ 11,000 $ 11,000 $ 11,000 $ 11,000
Paid-in Capital $ 200,000 $ 200,000 $ 220,000 $ 220,000 $ 220,000 $ 220,000 $ 220,000 $ 220,000 $ 220,000 $ 220,000 $ 220,000 $ 220,000
Dividends $ - $ - $ (2,500) $ (2,500) $ (2,500) $ (5,000) $ (5,000) $ (5,000) $ (7,500) $ (7,500) $ (7,500) $ (10,000)
Retained Earnings $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Current Year Earnings $ 2,817 $ 10,400 $ 15,402 $ 19,335 $ 17,887 $ 21,848 $ 27,315 $ 34,338 $ 44,971 $ 50,213 $ 59,065 $ 67,563
Total Shareholders' Equity $ 212,817 $ 220,400 $ 243,902 $ 247,835 $ 246,387 $ 247,848 $ 253,315 $ 260,338 $ 268,471 $ 273,713 $ 282,565 $ 288,563

Total Liabilities & $ 324,950 $ 337,842 $ 370,863 $ 362,038 $ 352,736 $ 356,455 $ 367,790 $ 380,119 $ 394,103 $ 397,592 $ 411,336 $ 424,835
Shareholders' Equity
 Page 3 of 5 ABC WIDGET COMPANY
FINANCIAL STATEMENTS
YEAR - 1

INCOME STATEMENT Month==>

1 2 3 4 5 6 7 8 9 10 11 12 Total Year

Revenue
Cash Sales $ 45,000 $ 47,500 $ 50,000 $ 45,000 $ 40,000 $ 45,000 $ 50,000 $ 52,500 $ 55,000 $ 50,000 $ 52,500 $ 55,000 $ 587,500
Credit Sales $ 65,000 $ 67,500 $ 70,000 $ 65,000 $ 60,000 $ 65,000 $ 70,000 $ 72,500 $ 75,000 $ 70,000 $ 72,500 $ 75,000 $ 827,500
Total Revenue $ 110,000 $ 115,000 $ 120,000 $ 110,000 $ 100,000 $ 110,000 $ 120,000 $ 125,000 $ 130,000 $ 120,000 $ 125,000 $ 130,000 $ 1,415,000

Cost of Good Sold

Inventory $ 38,500 $ 40,250 $ 42,000 $ 38,500 $ 35,000 $ 38,500 $ 42,000 $ 43,750 $ 45,500 $ 42,000 $ 43,750 $ 45,500 $ 495,250
Shipping Containers $ 5,500 $ 5,750 $ 6,000 $ 5,500 $ 5,000 $ 5,500 $ 6,000 $ 6,250 $ 6,500 $ 6,000 $ 6,250 $ 6,500 $ 70,750
Freight $ 3,300 $ 3,450 $ 3,600 $ 3,300 $ 3,000 $ 3,300 $ 3,600 $ 3,750 $ 3,900 $ 3,600 $ 3,750 $ 3,900 $ 42,450
Total Cost of Good Sold $ 47,300 $ 49,450 $ 51,600 $ 47,300 $ 43,000 $ 47,300 $ 51,600 $ 53,750 $ 55,900 $ 51,600 $ 53,750 $ 55,900 $ 608,450

Gross Profit $ 62,700 $ 65,550 $ 68,400 $ 62,700 $ 57,000 $ 62,700 $ 68,400 $ 71,250 $ 74,100 $ 68,400 $ 71,250 $ 74,100 $ 806,550

Operating Expenses
Advertising $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 24,000
Accounting Services $ 1,000 $ 1,500 $ 2,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,500 $ 14,000
Depreciation $ 1,952 $ 2,457 $ 3,067 $ 3,067 $ 3,067 $ 3,067 $ 3,472 $ 3,833 $ 3,833 $ 3,833 $ 3,833 $ 3,833 $ 39,315
Amortization $ 368 $ 368 $ 368 $ 368 $ 368 $ 368 $ 368 $ 368 $ 368 $ 368 $ 368 $ 368 $ 4,412
Marketing $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 60,000
Telephone & Internet $ 2,200 $ 2,300 $ 2,400 $ 2,200 $ 2,000 $ 2,200 $ 2,400 $ 2,500 $ 2,600 $ 2,400 $ 2,500 $ 2,600 $ 28,300
Insurance $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 12,000
Supplies - Office $ 750 $ 750 $ 750 $ 750 $ 750 $ 750 $ 750 $ 750 $ 750 $ 750 $ 750 $ 750 $ 9,000
Travel & Entertainment $ 2,500 $ 2,500 $ 2,500 $ 2,500 $ 2,500 $ 2,500 $ 2,500 $ 2,500 $ 2,500 $ 2,500 $ 2,500 $ 2,500 $ 30,000
Auto Expense $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 $ 6,000
Facility Rent $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 60,000
Facility Maintenance $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 12,000
Salaries & Wages $ 30,000 $ 25,000 $ 30,000 $ 27,500 $ 30,000 $ 27,500 $ 30,000 $ 30,000 $ 27,500 $ 30,000 $ 27,500 $ 30,000 $ 345,000
Payroll Taxes $ 3,600 $ 3,000 $ 3,600 $ 3,300 $ 3,600 $ 3,300 $ 3,600 $ 3,600 $ 3,300 $ 3,600 $ 3,300 $ 3,600 $ 41,400
Processing Fees $ 250 $ 250 $ 250 $ 250 $ 250 $ 250 $ 250 $ 250 $ 250 $ 250 $ 250 $ 250 $ 3,000
Legal $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 12,000
Total Operating Expenses $ 58,120 $ 53,625 $ 60,434 $ 56,434 $ 59,034 $ 56,434 $ 59,840 $ 60,301 $ 57,601 $ 60,201 $ 57,501 $ 60,901 $ 700,427

Operating Profit $ 4,580 $ 11,925 $ 7,966 $ 6,266 $ (2,034) $ 6,266 $ 8,560 $ 10,949 $ 16,499 $ 8,199 $ 13,749 $ 13,199 $ 106,123

Other Inc/(Exp)-Interest Exp $ 247 $ 258 $ 270 $ 215 $ 193 $ 172 $ 150 $ 145 $ 140 $ 135 $ 130 $ 125 $ 2,180

Pre-tax Income $ 4,333 $ 11,667 $ 7,696 $ 6,051 $ (2,228) $ 6,094 $ 8,410 $ 10,804 $ 16,359 $ 8,064 $ 13,619 $ 13,074 $ 103,943

Income Tax Provision $ 1,517 $ 4,083 $ 2,693 $ 2,118 $ (780) $ 2,133 $ 2,944 $ 3,781 $ 5,726 $ 2,822 $ 4,767 $ 4,576 $ 36,380

Net Income $ 2,817 $ 7,583 $ 5,002 $ 3,933 $ (1,448) $ 3,961 $ 5,467 $ 7,023 $ 10,633 $ 5,242 $ 8,852 $ 8,498 $ 67,563

Current Year Earnings $ 2,817 $ 10,400 $ 15,402 $ 19,335 $ 17,887 $ 21,848 $ 27,315 $ 34,338 $ 44,971 $ 50,213 $ 59,065 $ 67,563
 Page 4 of 5 ABC WIDGET COMPANY
FINANCIAL STATEMENTS
YEAR - 1

CASH FLOW STATEMENT 1 2 3 4 5 6 7 8 9 10 11 12 Total Year

Cash Flow from Operations

Net Income __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________

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Subtotal __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________

Change in Working Capital

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Inventory __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________

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Deferred Income Taxes __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________

Total Change in Working Capital __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________

Net Cash Flow from Operations __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________

Cash Used for Investments

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Rent Deposit __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________

Investment __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________

Patents __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________

Total Cash Used for Investments __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________

Cash Flow from Financing/Funding

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Long Term Loans __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________

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Beginning Cash __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________
 Page 5 of 5 ABC WIDGET COMPANY
FINANCIAL STATEMENTS
YEAR - 1

Ending Cash __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________