2009
2010
Net sales
14,079
15,065
COGS
9,011
10,244
Gross profit
5,068
4,821
Operating expense
3,520
3,615
Interest expense
105
125
Interest income
17
19
Pretax profit
1,461
1,099
Income tax
497
374
Net income
964
725
2011
16,360
10,798
5,562
4,090
128
15
1,359
462
897
500
5,245
1,227
6,972
2,988
9,960
Accounts payable
Notes payable, bank
Accrued taxes
Long-term debt, current portion
Current liabilities
Long-term debt
Total liabilities
Shareholders equity
Total liabilities and shareholders equity
966
826
139
100
2,031
1,000
3,031
6,929
9,960
Exhibit 1 2012 Pro Forma Balance Sheets and Accured Taxes Under Seasonal Production (in thousands of dollars)
Cash
Accounts receivableb
Inventoryc
Current assets
Net PP&Ed
Total assets
a
Accounts payablee
Notes payable, bank
Accrued taxesf
Long-term debt, current portion
Current Liabilities
Long-term debtg
Total liabilities
Shareholders' equity
Total liabilities and equity
Accrued Taxes
Beg. accrued taxes
Accrual of monthly taxes
Tax payments
End. accrued taxes
Actual Dec
31, 2011
500
5,245
1,227
6,972
2,988
9,960
Jan
Feb
1,511
2,541
1,227
5,280
2,988
8,268
2,950
832
1,227
5,009
2,988
7,997
Mar
2,768
630
1,227
4,625
2,988
7,613
Apr
2,477
554
1,227
4,259
2,988
7,247
May
2,274
378
1,227
3,879
2,988
6,867
966
826
139
100
2,031
1,000
3,031
6,929
9,960
232
0
94
100
425
1,000
1,425
6,842
8,268
160
0
26
100
286
1,000
1,286
6,710
7,997
137
0
-188
100
49
1,000
1,049
6,564
7,613
125
0
-388
100
-163
1,000
837
6,409
7,247
53
0
-492
100
-339
1,000
661
6,206
6,867
139
139
-45
0
94
94
-68
0
26
26
-75
-139
-188
-188
-80
-120
-388
-388
-105
0
-492
Assumed equal to 50% of the current month's COGS for seasonal production; and was related to material purchases that accounts for 50% of COGS for 20
seasonal production and sales pattern.
e
Taxes payble on 2011 income are due March 15, 2012. On April 15, June 15, September 15, and December 15, 2012, payments of 25% of each of the estim
of $480,000. This implies a payment of $120,000 in April, June, September and December.
g
To be repaid at the at rate of $50,000 each June and December
f
Jun
1,946
239
1,227
3,413
2,988
6,401
Jul
1,625
391
1,227
3,243
2,988
6,231
Aug
1,246
643
1,227
3,116
2,988
6,104
59
0
-715
100
-556
950
394
6,007
6,401
125
0
-795
100
-571
950
379
5,851
6,231
-492
-103
-120
-715
-715
-80
0
-795
Sep
Oct
Nov
Dec
758
2,457
1,227
4,442
2,988
7,430
500
3,843
1,227
5,570
2,988
8,558
500
5,771
1,227
7,498
2,988
10,486
500
6,489
1,227
8,216
2,988
11,204
178
0
-857
100
-578
950
372
5,732
6,104
980
0
-757
100
323
950
1,273
6,158
7,430
832
785
-590
100
1,126
950
2,076
6,482
8,558
1,889
80
-55
100
2,014
950
2,964
7,522
10,486
1,170
847
111
100
2,228
900
3,128
8,076
11,204
-795
-61
0
-857
-857
219
-120
-757
-757
167
0
-590
-590
536
0
-55
-55
285
-120
111
ounts for 50% of COGS for 2012. This represents a 30-day payment period. Since inventories are level, purchases will follow
nts of 25% of each of the estimated tax for 2012 are due. In estimating its tax liability for 2012, the company uses a tax liability
Exhibit 2 2012 Pro Forma Income Statement Under Seasonal Production (in thousands of dollars)
Jan
Feb
Mar
Apr
Net sales
702
486
414
378
a
COGS
463
321
273
249
Gross profit
239
165
141
129
Operating expensesb
Interest expense
Interest incomec
Profit (loss) before tax
Income taxesd
Net income
360
11
1
-132
-45
-87
360
7
3
-200
-68
-132
360
7
5
-222
-75
-146
360
7
5
-234
-80
-155
May
Jun
162
107
55
180
119
61
360
7
4
-308
-105
-203
360
7
4
-302
-103
-200
Jul
378
249
129
Aug
540
356
184
2,970
1,960
1,010
2,520
1,663
857
5,724
3,778
1,946
3,546
2,340
1,206
Total
18,000
11,880
6,120
360
7
3
-235
-80
-155
360
7
3
-181
-61
-119
360
7
2
645
219
426
360
7
1
491
167
324
360
11
1
1,576
536
1,040
360
7
1
839
285
554
4,320
94
32
1,737
591
1,147
Sep
Oct
Nov
Dec
Exhibit 3 2012 Pro Forma Cash Flow Statement Under Seasonal Production (in thousands of dollars)
Jan
Feb
Mar
Operating Activities
Net income
-87
-132
-146
Depreciation
25
25
25
Less: Increase (Decrease) in A/R
-2,704
-1,710
-202
Less: Increase (Decrease) in Inventory
0
0
0
Add: Increase (Decrease) in A/P
-735
-71
-24
Add: Increase (Decrease) in Accrued Taxes
-45
-68
-214
Cash flow from operations
1,862
1,464
-157
Investing Activities
Less: capital expenditures
Cash flow from operating and investing
Cash available before financing activities
Financing Activities
Less: bank note repayment
Less: debt repayment
Add: bank note issuance
Cash flow from financing
Total Cash Flow
Apr
May
-155
25
-76
0
-12
-200
-265
-203
25
-176
0
-71
-105
-178
-25
1,837
1,837
-25
1,439
2,450
-25
-182
2,268
-25
-290
1,977
-25
-203
1,774
826
0
0
-826
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,011
1,439
-182
-290
-203
Jun
Jul
Aug
Sep
Oct
Nov
Dec
-200
25
-139
0
6
-223
-253
-155
25
151
0
65
-80
-296
-119
25
252
0
53
-61
-354
426
25
1,814
0
802
99
-463
324
25
1,386
0
-149
167
-1,018
1,040
25
1,928
0
1,057
536
731
554
25
718
0
-719
165
-693
-25
-278
1,496
-25
-321
1,125
-25
-379
746
-25
-488
258
-25
-1,043
-785
-25
706
706
-25
-718
-718
0
50
0
-50
0
0
0
0
0
0
0
0
0
0
0
0
0
0
785
785
706
0
0
-706
0
50
768
718
-328
-321
-379
-488
-258