Chemalite Inc.

2-Jan Patent
Bank
Common Stock

Debit
125000
375000

15-Jan Pre-Opening Incorp.

Bank

7500

15-Jun Machinery
Bank

62500

24-Jun Inventory-Raw Material

Bank

75000

5 July

Prototype
Bank

6 Dec

Cash
A/c Receivable
Revenue

685000
69500

Inventory - RM
Bank

175000

Advertising Expense
Bank

10

31-Dec Direct Labor+OH

Bank
31-Dec Salaries+Corporate Expense
Bank

23750

22500

350000

80000

11 July, 04

Machinery
Bank

150000

12

Bank
Loan Payable

50000

13

Loan Payable
Bank

50000

14

Interest Expense

750

Interest Payable
16

Depreciation Expense
Accumulated Depreciation

10625

18

Patent - Amortization Expense

Accumulated Amortization

12500

19

Prototype - Amortization Expense

Accumulated Amortization

2375

Credit
12500
500000
4-Jan
7500

-571250
4-Jan
6250

3125

62500
4-Jan
75000
4-Jan
23750

4-Jan
754500

175000

22500

350000

80000
15000
150000

50000

50000
RM

7500

750

10625

12500

2375

Beginning balance
Additions
Subtractions
Ending balance

14875

75000
175000
195000
55000

Adjusting Entries

Incorporation Asset
Pre-Opening Inc.

7500
7500

Inventory
Depreciation
Amortization

25500

COGS
Inventory

25500

10625
14875

25500

Inventory
DL + OH
Raw Materials

545000

COGS
Inventory

545000

350000
195000

545000

Income Statement
Sales
Less: COGS
Gross Profit
Expenses:
SGA
Depreciation
Amortization
Interest
Advertising Expense
Total Expenses
Net Income

754500
570500
184000

80000
10625
14875
750
22500
128750
55250

Statement of CashFlows
Net Income
Add back: Depreciation
Add back: Amortization

55250
10625
14875

Adjusted Net Income

Operating Activities:
A/c Receivable
Patent
Prototype
Advertising
SGA
Inventory

80750

-69500
-125000
-23750
-22500
-80000

Net Cash Flow from Operating Activities

Investing Activities:
Machinery

-212500

Net Cashflow from Investing

Financing Activities:
Common Stock

-320750

-212500

500000

Net Cashflow from Financing Activities

500000

Net Cash Proceeds

47500
113000
65500