Essay About Assignment And Chemalite Case

Chemalite Case Study
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Assignment 2This 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.Chemalite CaseRequired: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.  Prepare Chemalite’s balance sheet as of December 31, 2003.Prepare Chemalite’s income statement for 2003.TransactionCash+A/R+Inventory+PP&E+Intangibles=Loan+Common stock+Retained earningsIssue 500K shares375,000 125,000 500,000 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 received685,000 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 $50K50,000 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 GamesNANANANANANANANAEnding balance 12/31/03113,000 69,500 55,000 201,875 100,000 500,000 39,375 Chemalite’s balance sheet as of December 31, 2003AssetsCash113,000Accounts Receivable69,500Inventory55,000Total Current Assets237,500Property, Plant & Equipment201,875Intangibles100,000Total Assets539,375Liabilities & Stockholders’ EquityCommon Stock500,000Retained Earnings39,375Total Liabilities & Stockholders’ Equity539,375Chemalite’s income statement for FY2003