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Chemalite Inc - Assignment - Accounting

Chemalite Inc received $375,000 from investors in January 2003. By June 2003, they had spent $7,500 on legal fees, $62,500 on building machinery, and $75,000 purchasing plastics and chemicals, leaving $230,000 cash on hand. Their income statement for the period showed $0 in revenue as they had not begun production, and $20,000 in losses from pre-operative expenses and patent amortization. Their balance sheet as of June 2003 showed $480,000 in total assets including $230,000 cash, $75,000 in plastics and chemicals, and $175,000 in fixed assets including machinery and a patent. They had $500,000

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2K views2 pages

Chemalite Inc - Assignment - Accounting

Chemalite Inc received $375,000 from investors in January 2003. By June 2003, they had spent $7,500 on legal fees, $62,500 on building machinery, and $75,000 purchasing plastics and chemicals, leaving $230,000 cash on hand. Their income statement for the period showed $0 in revenue as they had not begun production, and $20,000 in losses from pre-operative expenses and patent amortization. Their balance sheet as of June 2003 showed $480,000 in total assets including $230,000 cash, $75,000 in plastics and chemicals, and $175,000 in fixed assets including machinery and a patent. They had $500,000

Uploaded by

thi_aar
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Chemalite Inc – Accounting & Finance

1)
CHEMALITE INC.
CASH TRANSACTION SUMMARY FOR SIX MONTH PERIOD ENDED JUNE, 2003
DATE Amount Description
$
January 2, 2003
375,000 Received from invstors upon issueing share
$
January 15, 2003
(7,500) Paid for legal, charter and printing expenses
$
June 15, 2003
(62,500) Building the machinery
$
June 24, 2003
(75,000) Purchasing Plastics and Chemicals
$
Cash Balance as June 230,000  

2)
CHEMALITE INC
INCOME STATEMENT FOR THE PERIOD ENDED JUNE 31, 2003

REVENUES:
$
Fees Earned -
EXPENSES:
$
Pre-operative expenses (7,500)
$
Patent Amortization (12,500)
$
Net Income (Loss) (20,000)        

Analysis:
The company has been incurred a loss equail to only $ 20,000 not the amount claimed by
Mr. Larson, as it has not started production and making money by selling the products
The incurred loss has been due to pre-operative expenses and amortization of the patent
for six months.
3)
CHEMALITE INC.
Balance Sheet
JUNE 31, 2003
ASSET
CURRENT ASSETS
$
CASH 230,000
$
PLASTIC & CHEMICAL 75,000
$
TOTAL CURRENT ASSET 305,000

FIXED ASSETS
$
PLANT AND MACHINERY 62,500
$
PATENT 125,000
$
Less patent amortization (12,500)
$
112,500
$
TOTAL FIXED ASSET 175,000
$
TOTAL ASSET 480,000

LIABILITIES
$
TOTAL LIABILITIES -

STOCKHOLDERS' EQUITY
$
CAPITAL STOCK 500,000
$
RETAINED EARNING (20,000)
TOTAL STOCKHOLDER $
EQUITY 480,000

$
TOTAL STOCKHOLDER EQUITY AND LIABILITIES 480,000

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