FSA

Project 1
The balance sheet of DCC Corp., as of the end of Quarter 2, is provided below.
BS
Assets Liab. & Owners Equity
Cash $11,300 Accounts payable $500
A/R $1,000
Inventory Long-term debt $8,000
parts $600 Common Stock $4,000
finished goods $6,000 ($2 par value)
Paid-in-surplus $5,000
Retained Earnings $1,400
Total Assets $18,900 Liab. & Owners Equity $18,900
During Quarter 3:
DCC purchased $3000 worth of parts, $2000 with cash, the remainder to be paid in Quarter 4.
Sold 6 computers, each for $600.
4 were sold for cash, 2 were sold on credit with payment to be received in Quarter 4.
The gross margin was 32%
Interest expense = 100 (paid in Quarter 3)
All SG&A expenses were paid in Quarter 3
The pre-tax margin was 23%
The tax rate is 30% and Quarter 3 taxes will be paid in Quarter 4
The dividend payout ratio is 35% (paid immediately)
200 new shares of common stock were issued and sold for $1000 in Quarter 3
Purchase the warehouse DCC is located in for $20,000 on the first day of Quarter 3
You pay $10,000 down & finance the rest with long-term debt
You depreciate the warehouse over 40 years. Monthly depreciation expense is $40.
1, Create journal entries for Quarter 3 transactions, and the Quarter 3 ending balance sheet.
(Hint: you will need to create the income statement.)
2. Create a STATEMENT OF CASH FLOW for Quarter 3.