Reference no: EM132960882

The Martins know that setting up some projected Income Statements are important. They need to look at what the first year of operations might look like and if possible they will need to look at the years thereafter to get an impression of what the long term might look like.

RM Purchases: $132,000* (Raw Material Purchases is a part of COGS)
Sales Salaries: 80,000
Advertising: 3,000
Travel: 2,000
Revenue: 360,000
Financing Costs: 10,000
Office Lease: 13,000
Depreciation: 38,000
Income Taxes: 22,000
Admin Salary: 40,000

A second financial statement that is key to understanding a business is the Balance Sheet. The Martins have estimated the following accounts to be a part of their initial Balance Sheet.

Trade Receivables: $35,000
Cash: 15,000
Short Term Loan: 30,000
Share Capital: 100,000
Long Term Liabilities: 60,000
Property, Plant: 170,000
Prepaid Expenses: 5,000
Yearly LTD Retirement: 5,000
Retained Earnings: 25,000
Accumulated Dep'n: 38,000
Current Payables: 17,000
Inventories: 50,000

Problem 1: With the above accounts, prepare CompuTech's Income Statement for the year ended, December 31, 2021.

Problem 2: With the above accounts, prepare CompuTech's Balance Sheet as at December 31, 2021.

Problem 3: Which of the above accounts are FIXED, and which are VARIABLE?

Problem 4: What is the COGS for the year 2021?