Financial Management Solution to problem Set 2-1B,

Warner Company
Balance Sheet
December 31, 2003

Assets

Current Assets
Cash                                     $ 225,000
A/c recieveable                       153,000
Inventory                                  99,300
Prepaid Expense                        14500
Total Current Assets              491, 800
Building & Equipments          895,000
Accumulated Depreciation    (263,000)
Net Building & Equipment    632000
Total Assets                           11,23,800

Liabilities & Owners Equity

Current Liabilities:
A/C Payable      102,000
Notes Payable     75,000
Tax Payable      53,000
Accrued Expenses    7900
Total Current Liabilities      237,900
Long Term Debt      3,34,000
Total Liabilities        571,900

Equity

Common Stock        289,000
Retained earnings     262,900
Total Equity              551,900
Total Liabilities and Owners Equity      11,23,800


Warner Company
Income Statement
For the Yr end Dec 31, 2003


 Sales                                             $                        573,000
CGS                                                                        297,000
Gross profits                                                           276,000

General & Admin Expense      79,000
Depreciation Expense               66,000

Total Operating Expense                                       145,000
Operating Income(EBIT)                                       131,000
Interest Expense                                                         4,750
Earning b4 Tax                                                       162,250
Taxes                                                                        50,500
Net Income                                                              75,750