Assignment 2

Topics: Financial ratios, Balance sheet, Generally Accepted Accounting Principles / Pages: 11 (1676 words) / Published: Jan 24th, 2015
Student Number:
994633928

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Assignment Title:
Assignment #2: ALLGOMOTIVE INC (AGM)

Course Code:
RSM 1320

Course Title:
Financial Accounting

Section #:
1
2
3
4

5

AM
PM

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Professor Name:
Dragon Stojanovic


994633928

1.) Create the income statements for the fiscal 2015 pro-forma [NOTE: please use the same format for the income statement as in Exhibit 2]. (13 points)

AGM Income Statement
For fiscal year ending October 31st
2015
2014
Sales
8,215,000 6,497,500
COGS
5,159,850 4,721,900
Gross Profit 3,055,150 1,775,600

Operating Expenses:

Rent 438,500 288,500
Insurance
173,000 183,000
Depreciation Expense 146,625 57,500

(57,500)
Interest Expense 460,000 138,000
Salaries Expense 989,400 694,600

Operating Expenses: 2,207,525 1,361,600

Gains or Losses (190,000) -
Income before taxes 657,625 414,000
Income taxes (24%) 157,830 99,360
Net Income 499,795 314,640

2.) Create the statement of cash flows for the fiscal 2015 pro-forma using the indirect method. (22 points)

CDX Statement of Cash Flows
REFERENCE
CFO:

Net income $499,795

Reconciling items

Loss on sale of equipment $190,000 (6) Depreciation $146,625

Increase in A/R

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