Based on the information provided below, prepare the following financial state ments for VideoStores: a. An income

Question:

Based on the information provided below, prepare the following financial state ments for VideoStores:

a. An income statement for the calendar year 2010

b. A balance sheet on December 31, 2009

c. A balance sheet on December 31, 2010

1. Accounts receivable increased by $6,400,000 in 2010

2. Profits in 2010 were taxed at 36 percent

3. At the end of 2010, inventories equaled 10 percent of the year's sales

4. The net book value of fixed assets at the end of 2009 was $76 million

5. Cost of goods sold, other than the direct labor expenses related to the assembling of computers, equaled 70 percent of sales in 2010

6. The average interest rate on short- and long-term borrowing in 2010 was 10 percent of the amount borrowed at the beginning of the year

7. Accounts receivable at the end of 2010 equaled 12 percent of sales

8. Accounts payable at the end of 2009 equaled $30 million

9. Depreciation expense was $9 million in 2010

10. The company owed its employees $4 million at the end of 2009; a year later it owed them $2 million

11. Material purchased in 2010 amounted to $228 million

12. Selling, general, and administrative expenses for 2010 were $18 million

13. Taxes payable in 2009 equaled $6 million, and the company paid in advance the same amount on December 15, 2009

14. The balance of long-term debt was $27 million at the beginning of 2009, of which $4 million was due at year-end

15. The company did not issue shares of common stocks or repurchase outstanding shares in 2010

16. Direct labor expenses equaled 11.25 percent of 2010 sales

17. Repayment of long-term debt is $4 million per year

18. Inventories rose from $28 million at the end of 2009 to $32 million at the end of 2010

19. In 2010, one of the company's warehouses was enlarged at a cost of $14 million, which was partly financed with a $6 million long-term loan

20. In 2010, dividends were $9,200,000

21. Accounts payable at the end of 2010 equaled two months of purchases

22. Equity capital at the end of 2009 was $81 million

23. At the end of 2009, the company had enough cash to pay a quarter of its accounts payable; at the end of 2010, to pay 30 percent

24. Thecompany paidin advance $10,800,000oftaxes on December 15,2010

25. The company borrowed $3 million short-term at the end of 2009. A year later, it borrowed $5 million short-term

26. The company's prepaid expenses were $1,500,000 (prepaid rent and in surance premium) in 2009, and $2,200,000 a year later

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