Jenga Inc

Jenga Inc engages in the following transactions:

Year one Year two

Issues common shares 1,000

Borrows 400
Repays loan 100
Pays interest 24 18

Buys property and plant (estimated

useful life is 10 years) 900
Buys inventory 350 400
(cash paid for inventory) 320 380
Sells inventory for 510 550
(cash received from sales) 430 480
Inventory left at year end 60 80

Pays expenses 40 50
Pays tax at 30%
Pays a dividend 30 5

Requirements

1. Produce a balance sheet and income statement for Jenga Inc for years one
and two
2. Produce the financial statements for year two.

Corporate Finance Institute 33772 1

Balance sheet year one Income statement year one

ASSETS Year one

Revenues
Current assets Cost of sales
Gross profit
Expenses

Depreciation

Operating profit (EBIT)

Non current assets
Finance costs

Profit before tax

LIABILITIES Tax at 30%

Current liabilities Net income

Dividend

Non current liabilities Retained earnings

Shareholders equity

Corporate Finance Institute 33772 2

Balance sheet year two Income statement year two

ASSETS Year one

Revenues
Current assets Cost of sales
Gross profit
Expenses

Depreciation

Operating profit (EBIT)

Non current assets
Finance costs

Profit before tax

LIABILITIES Tax at 30%

Current liabilities Net income

Dividend

Non current liabilities Retained earnings

Shareholders equity

Corporate Finance Institute 33772 3