Bal Sheet

B A L A N C E S H E E T F O R P E P S IC O , IN C F ig u r e s in m illio n o f d o lla r s s s e ts L ia b ilt ie s & s h a re h o ld e r e q u it ie s u r re n t a s s e t s C u rr e n t lia b ilit ie s a s h a n d e q u iva le n t s 3 1 1 1 , 9 2D8 e b t d u e fo r r e p a y m e n t 3 , 9 2 1 0 a rk e t a b le s e c u r it ie s 83 9 5 5A c c o u n t P a y a b le 3 8 7 0 3 ,6 1 e c e iva b le s 2 , 4 5 3 2 , 1 5O0 t h e r c u r r e n t lia b ilit ie s 1 2 3 64 ve n t o rie s 1 , 0 1 6 7 3 2T o t a l c u r r e n t lia b ilit ie s 7 , 9 1 4 4 , 2 5 th e r c u rre n t a s s e ts 499 4 8 6L o n g - t e r m d e b t 4 ,0 2 8 4 ,9 4 o t a l c u rre n t a s s e ts 4 3 6 2 6 , 2 5O1 t h e r lo n g - t e rm d e b t 4 , 3 1 7 3 , 9 6 ix e d a s s e t s t o t a l lia b ilit ie s 1 6 ,2 5 9 1 3 ,1 r o p e r t y , p la n t , a n d e q u1ip3 m, 1 e1 n0 t 1 1 , 2 9S4h a r e h o ld e r 's e q u it y e s s : A c c u m u la t e d d e p 5r e, 7c 9ia2t io 5n , 0 3c3o m m o n s t o c k 1 ,1 9 5 1 ,3 4 e t fix e d a s s e t s 7 , 3 1 8 6 , 2 6R1 e t a in e d e a rn in g s 5 ,2 0 6 5 ,5 9 t a b g ib le a s s e t s 8 , 9 9 6 5 , 8 5T5o t a l s h a r e h o ld e r s ' e q u it6y, 4 0 1 6 , 9 3 th e r a s s e ts 1 ,9 8 4 1 ,7 3 4 o ta l a s s e ts 2 2 , 6 6 0 2 0 , 1 0T1o t a l lia b ilit ie s a n d s h a 2r e2h, 6o 6ld0e2r 0 , 1

INCOME STATEMENT FOR PEPSICO,INC. Figures in millions of dollars Net sales 22,348 Cost of goods sold 9,330 Other expenses 291 Selling, general, and admin. Exp 8,912 Depreciation 1,234 Earning before tax and interest 2,581 Interest expense 321 Taxable income 2,260 Taxes 270 Net Income 1,990 Dividend 1,233 Retained earning 757

ABC COMPANY INCOME STATEMENT DATA PURCHASES SALES SALES RETURN OPENING STOCK ADMINISTRATIVE EXPENSE SELLING EXPENSE INTEREST EXPENSE INCOME TAX(40%) DIVIDEND PAID DIVIDENT PROPOSED CLOSING STOCK Required: Prepare Income statement

175,000 500,000 5000 28,500 50,000 60,000 20,000 ? 10,000 20,000 18,500

INCOM ESTATEM ENT-ABCCO SALES SALESRETURN NETSALES LESS: COSTO FGOO DSSOLD O PENINGSTOCK PURCHASES LESS :CLO SINGSTOCK COST G ROSSPROFIT LESS:OPERATINGEXPENSE ADM INISTRATIVEEX PENSE SELLINGEX PENSE TOTALEX PENSE EARNINGBEFOREINTERESTANDTAX INTERESTEX PENSE EARNINGAFTERINTEREST INCOM ETAX (40% ) EARNINGAFTERTAX DIVIDENDPAID DIVIDENTDPROPOSED RETAINEDEARNING

500,000 5000 495,000 28,500 175,000 18,500 185,000 310,000 50,000 60,000 110,000 200,000 20,000 180,000 72000 108,000 20,000 30,000 58,000

BALANCE S HEET DATA O F ABC CO . CASH 7 0 , 0 A0 0/ C R E C E IV A B L E C O M M O N S T O C K 5 0 0 , 0R0E0 S E R V E C L O S IN G S T O C K 1 8 , 5 A0 0C C U M U L A T E D D A /C P A Y A B L E 3 7 , 0 P0 0R E P A Y M E N T S A C C R U E D E X P E N S3 E5 , 0 0 0 L O N G - T E R M L O A N2 0 0 , 0 0 0 F IX E D A S S E T S 9 0 0 ,0 0 0 R E T A IN E D E A R N IN1 2G 5 , 0 0 0

6 0 ,0 5 0 ,0 E1 1P 6. , 1 5 ,0

R e q u ir e d : P re p a re c la ssifie d B a la n c e S h e e

B A L A N C E S H E E T -A B C C O .

CURRENT AS S ETS C U R R E N T L IA IL IT Y CASH 7 0 , 0 0 A0 / C P A Y A B L E 3 7 ,0 0 A /C R EC E IV A B L E 6 0 , 0 0 A0 C C R U E D E X P E N S E 3 5 ,0 0 P REP AYM ENTS 1 5 , 0 0 T0 O T A L C U R R E N T L I A B I L 7I T2Y, 0 0 C L O S IN G S T O C K 1 8 ,5 0 0 T O T A L C U R R E N T A S S E1T6S3 , 5 0F0I X E D L I A B I L I T Y L O N G -T E R M L O A N 2 0 0 ,0 0

F IX ED A S S ET S 9 0 0 , 0 0S0 H A R E H O L D E R 'S E Q U I T Y L E S S :A C C U M U L A T E D D1E1P6 5 0C0 O M M O N S T O C K 5 0 0 ,0 0 R ES ERV E 5 0 ,0 0 R ET A IN E D E A R N IN G 1 2 5 ,0 0 6 7 5 ,0 0 94 7 ,0 0 0 9 4 7 ,0 0

B A L A N C E S H E E T -A B C C O . F IX E D A S S E T S 9 0 0 , 0 0S0 H A R E H O L D E R 'S E Q U I T Y L E S S :A C C U M U L A T E D D-1E 1P6 5 0C0 O M M O N S T O C K 5 0 0 ,0 0 R ES ERV E 5 0,00 R ET A IN E D E A R N IN G 1 2 5 ,0 0 CURRENT AS S ETS 6 7 5 ,0 0 C L O S IN G S T O C K 1 8 ,5 0 0 P R E P A Y M E N TS 1 5 , 0 0 F0 I X E D L I A B I L I T Y A / C R E C E IV A B L E 6 0 , 0 0 L0 O N G -T E R M L O A N 2 0 0 ,0 0 CASH AND BANK 7 0 ,0 0 0 C U R R E N T L IA IL IT Y A /C P A Y A B L E 3 7,00 ACCRUED EX P ENS E 3 5,00 T O T A L C U R R E N T L I A B I L I7T2Y, 0 0 9 4 7 ,0 0 0 9 4 7 ,0 0

CLASS ACTIVITY Q: SALES RS. 500,000 COST OF GOODS SOLD 75% OF SALES GROSS PROIFT ?????? OPERATING EXPENSE 70,000 EBIT ????? Q: cost of goods sold is Rs. 765,000 which is 65% of sales. Operating expense is 20% of sales and interest expense is 2.5% of sales Prepare INCOME STATEMENT

FORMULAS 1. SALES-COST = GROSS PROFIT 2. OP.STOCK+PURCHASES-CL.STOCK= COST 3. GROSS PROFIT-OPERATING EXPENSE=EBIT 4. EBIT-INTEREST= EBT 5. EBT-TAX = EARNING AFTER TAX 6. EARNING AFTER TAX-DIVIDEND= RETAINED EARNING

ANSWER SALES RS. 500,000 COST OF GOODS SOLD 375,000 GROSS PROFIT 125,000 OPERATING EXPENSE 70,000 EARNING BEFORE INTEREST AND TAX RS, 55,000 SALES RS. 1176923 OPERATING EXPENSE RS. 235385 INTEREST EXPENSE RS. 29423

ACTIVITY RETAINED EARNING-1998 $ 47,500 PROFIT AFTER TAX AND INTEREST $320,700 CASH DIVIDEND $ 25,000 CASH DIVIDEND PROPOSED RETAINED EARNING-1999 $

$ 50,000 ???

ACTIVITY • • • • • • • •

SALES $ 800,000 COST 68% OF SALES OPERATING EXPENSE 18% OS SALES INTEREST EXPENSE 40,000 TAX 40% COMMON STOCK $ 600,000 DIVIDEND PAID 20% Prepare income statement

ACTIVITY • • • • • •

GROSS PROFIT 25% COST OF GOODS SOLD $ 375,000 OPERATING EXPENSE 15% OF SALES LOAN $ 500,000 INTEREST ON LOAN 10% DIVIDEND PAID 25% ( COMMON STOCK $ 800,000)

ACTIVITY • • • • • • • • • • •

Cash 100,000 Plant 350,000 Equipment 75,000 Closing stock 120,000 A/c Payable 90,000 Long-term loan 200,000 Common stock 10,00,000 Reserve 150,000 Retained earning ???? Accrued expense 15,000 Marketable securities 85,000

Prepare balance sheet