Essays24.com - Term Papers and Free Essays
Search

Chemalite Case Study

Essay by   •  August 28, 2019  •  Case Study  •  1,112 Words (5 Pages)  •  2,008 Views

Essay Preview: Chemalite Case Study

Report this essay
Page 1 of 5

Assignment 2

This assignment has two parts.  Part A relates to the Chemalite case.  (Purchase instructions are in the syllabus.)   Part B asks about the Statement of Cash Flows for Scholastic Corporation. Part C relates to Scholastic Corporation’s taxes.

  1. Chemalite Case

Required:

  1. Using the financial statement template, below, record the effect of each of Chemalite’s transactions for 2003.  Please make the simplifying assumption that Chemalite’s machinery is used solely for non-manufacturing purposes.  Please also assume that the depreciation on the machinery starts on July 1.  

  1. Prepare Chemalite’s balance sheet as of December 31, 2003.
  1. Prepare Chemalite’s income statement for 2003.

Transaction

Cash

+A/R

+Inventory

+PP&E

+Intangibles

=

Loan

+Common stock

+Retained earnings

Issue 500K shares

375,000

125,000

500,000

Pay $7.5K for legal fees

(7,500)

(7,500)

Pay $62.5K for machinery

(62,500)

62,500

Purchase $75K in materials

(75,000)

75,000

Pay $23.75K for prototypes

(23,750)

(23,750)

Sell $754.5K of product;

$69.5K not yet received

685,000

69,500

754,500

Purchase $175K in materials

(175,000)

175,000

Spend $22.5K in ads

(22,500)

(22,500)

Incur $350K in manufacturing costs;

Pay $80K for corporate expenses

(350,000)

(80,000)

350,000

(80,000)

Pay $150K for machinery

(150,000)

150,000

Borrow $50K

50,000

50,000

Depreciation expense

(10,625)

(10,625)

Cost of goods sold

(545,000)

(545,000)

Patent amortization

(25,000)

(25,000)

Repay $50K loan + $750 interest

(50,750)

(50,000)

(750)

Order received for Olympic Games

NA

NA

NA

NA

NA

NA

NA

NA

Ending balance 12/31/03

113,000

69,500

55,000

201,875

100,000

500,000

39,375

Chemalite’s balance sheet as of December 31, 2003

Assets

Cash

113,000

Accounts Receivable

69,500

Inventory

55,000

Total Current Assets

237,500

Property, Plant & Equipment

201,875

Intangibles

100,000

Total Assets

539,375

Liabilities & Stockholders’ Equity

Common Stock

500,000

Retained Earnings

39,375

Total Liabilities & Stockholders’ Equity

539,375

Chemalite’s income statement for FY2003

...

...

Download as:   txt (11 Kb)   pdf (157.2 Kb)   docx (22.8 Kb)  
Continue for 4 more pages »
Only available on Essays24.com
Citation Generator

(2019, 08). Chemalite Case Study. Essays24.com. Retrieved 08, 2019, from https://www.essays24.com/essay/Chemalite-Case-Study/90385.html

"Chemalite Case Study" Essays24.com. 08 2019. 2019. 08 2019 <https://www.essays24.com/essay/Chemalite-Case-Study/90385.html>.

"Chemalite Case Study." Essays24.com. Essays24.com, 08 2019. Web. 08 2019. <https://www.essays24.com/essay/Chemalite-Case-Study/90385.html>.

"Chemalite Case Study." Essays24.com. 08, 2019. Accessed 08, 2019. https://www.essays24.com/essay/Chemalite-Case-Study/90385.html.