Chemalite, Inc (B)

Problem Set #2: Chemalite Case
1. Record the effects of Chemalite’s 1991 events on the BSE worksheet
Cash Flow type (O, I, F)
Event Cash A/R 375,000 F P1 (7,500) I P2 P3 (62,500) I (75,000) O P4 230,000 Inventory Patent Cap. Exp. PPE 125,000 7,500 62,500 125,000 7,500 62,500 Notes Pay Paid in Capital RE 500,000 RE Explanation

75,000 75,000

-

500,000

-

Balance Sheet

O O O O O O I F

-

T1 T2 T3 T4 T5.1 T5.2 T6 T7.1 T7.2 O1 O2 O3 O4 O5 Total

(23,750) 685,000 69,500 (175,000) (22,500) (350,000) (80,000) (150,000) 50,000 (50,750)

(23,750) R&D Expense 754,500 Revenue 175,000 (22,500) Adv. Expense 350,000 (80,000) Admin Expenses 150,000 50,000 (50,000)

F
(545,000) (25,000) (10,625)

O (750) (545,000) (25,000) (10,625)
500,000

Interest Expense Inv. Adjustment Amort. Expense Depr. Expense

113,000

69,500

55,000

100,000

7,500

201,875

-

46,875 Balance Sheet

15.515 Fall 2003 Session 1

Problem Set #2: Chemalite Case
3. Balance Sheet (6/31/91):
Assets Cash Accounts Receivable Inventories Total Current Assets Property, Plant, & Equipment Other (Capitalized Start-up Expenses) Patent Total Assets Liabilities and Stockholders' Equity Common Stock Retained earnings Total Liabilities and SE 230,000 75,000 305,000 62,500 7,500 125,000 500,000

500,000 500,000
15.515 Fall 2003 Session 1

Problem Set #2: Chemalite Case
3. Income Statement (For 6 months June 30, 1991):
Revenue Costs and Expenses Advertising Administration Manufacturing costs Raw materials R&D Interest Depreciation Amortization of patent -

-

Net Income

-

15.515 Fall 2003 Session 1

Problem Set #2: Chemalite Case
3. Direct Statement of Cash Flows (6 months ended June 30, 1991):
Cash provided (used) by operating activities Received from customers Paid for inventory Paid for advertising Paid for manufacturing costs Paid for administration Paid for interest Paid for R&D expenses Cash provided (used) by investing activities