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Golden cup case study You were provided with the following balance sheet for Golden Cup firm for the year ended Dec 314, 2018 Assets Current Assets Cash Accounts Receivables Inventory Total Current Assets Consolidated Balance sheet Golden Cup As of Dec 31, 2018 Liabilities + Owners Equity Current Liabilities 40,000 Accounts Payable 12,000 4,000 Notes Payable 6,000 14.000 Accrue Wages 1000 58,000 Total Current Liabilities 19,000 Long term debt 40,000 Fixed Assets Property. Plant, and Equipment 56,000 Owners' equity 40,000 Goodwill Total Fixed Assets 24,000 80,000 Common Shares Retained Earnings Total Owners equity Liabilities + OLE 39,000 79,000 138.000 Total Assets 138.000 In addition to that you know the following facts about firm's operations throughout the year: Golden Cup revenues for the year includes the following: Domestic revenues $160,000. International revenues $80,000. Out of Golden Cup's sales, cost of sales and direct laboris 50% of annual revenues . Because of the strong competition that it faces. Golden Cup has a generous marketing plan. Golden Cup signed a contract with the marketing planet Inc, by which the marketing agency will be responsible for Golden Cup marketing for five years period started this year. The contract costs Golden Cup $100.000 that were paid up front, however the company thinks this plan will affect its sales evenly over the five years period. Golden Cup also spends $30,000 in the form of general and administrative expenses per year. Golden Cup depreciable assets historical value is $40,000 and is depreciated on a straight line basis over 10 years. . Golden Cup pays interest rate of 10% on its Long-term debt outstanding. Out of the year's net income, Golden Cup is planning to repay $30,000 to its shareholders in the form of cash dividends. The company currently has 60,000 shares outstanding - Please set up income statement for Golden Cup Consolidated Income Statement Golden Cup As of Dec 31, 2018 Show your workings here Finalwer here Revenues - Cost of goods sold Gross margin - Marketing expenses - General and administrative expenses Depreciation EBIT - Interest expenses EBT - Tax expenses Net income Dividends Additions to Retained Earnings b- Please use the US corporate tax rates to calculate Golden Cup tax liability What is the marginal tax rate of Golden Cup? - What is the average tax rate of Golden Cup? Question 2 Ms. Janet Mcloish works as an elementary school teacher and has a taxable income from her job of $35.000. She inherited 10% of Golden Cup shares outstanding and recently received her annual dividende - What is the amount of annual dividends received by Ms. Mcinish? b- What is Ms. Mcloish total tax liability it her tax status is (married filing together? (hint, you can find the personal Income tax rates on the following web page: httsoundation.org/2019 3. Mr. David Lawson, the CFO of Golden Cup plans to increase the company's long-term debt from $40,000 to $80.000 by getting a 5-year loan from bank of America. What type of financial decisions did MR. David take? - Will this decision result in Golden Cup to be excessively levered everything else remains unchanged? Show your calculations, knowing that industry average debt/equity ratio is 1. - Mc David is planning to use half of the long-term loan proceeds to increase Golden Cup inventory holdings, what type of financial decision is this? If nothing else changes, how would this decision affect Golden Cup liquidity? Golden cup case study You were provided with the following balance sheet for Golden Cup firm for the year ended Dec 314, 2018 Assets Current Assets Cash Accounts Receivables Inventory Total Current Assets Consolidated Balance sheet Golden Cup As of Dec 31, 2018 Liabilities + Owners Equity Current Liabilities 40,000 Accounts Payable 12,000 4,000 Notes Payable 6,000 14.000 Accrue Wages 1000 58,000 Total Current Liabilities 19,000 Long term debt 40,000 Fixed Assets Property. Plant, and Equipment 56,000 Owners' equity 40,000 Goodwill Total Fixed Assets 24,000 80,000 Common Shares Retained Earnings Total Owners equity Liabilities + OLE 39,000 79,000 138.000 Total Assets 138.000 In addition to that you know the following facts about firm's operations throughout the year: Golden Cup revenues for the year includes the following: Domestic revenues $160,000. International revenues $80,000. Out of Golden Cup's sales, cost of sales and direct laboris 50% of annual revenues . Because of the strong competition that it faces. Golden Cup has a generous marketing plan. Golden Cup signed a contract with the marketing planet Inc, by which the marketing agency will be responsible for Golden Cup marketing for five years period started this year. The contract costs Golden Cup $100.000 that were paid up front, however the company thinks this plan will affect its sales evenly over the five years period. Golden Cup also spends $30,000 in the form of general and administrative expenses per year. Golden Cup depreciable assets historical value is $40,000 and is depreciated on a straight line basis over 10 years. . Golden Cup pays interest rate of 10% on its Long-term debt outstanding. Out of the year's net income, Golden Cup is planning to repay $30,000 to its shareholders in the form of cash dividends. The company currently has 60,000 shares outstanding - Please set up income statement for Golden Cup Consolidated Income Statement Golden Cup As of Dec 31, 2018 Show your workings here Finalwer here Revenues - Cost of goods sold Gross margin - Marketing expenses - General and administrative expenses Depreciation EBIT - Interest expenses EBT - Tax expenses Net income Dividends Additions to Retained Earnings b- Please use the US corporate tax rates to calculate Golden Cup tax liability What is the marginal tax rate of Golden Cup? - What is the average tax rate of Golden Cup? Question 2 Ms. Janet Mcloish works as an elementary school teacher and has a taxable income from her job of $35.000. She inherited 10% of Golden Cup shares outstanding and recently received her annual dividende - What is the amount of annual dividends received by Ms. Mcinish? b- What is Ms. Mcloish total tax liability it her tax status is (married filing together? (hint, you can find the personal Income tax rates on the following web page: httsoundation.org/2019 3. Mr. David Lawson, the CFO of Golden Cup plans to increase the company's long-term debt from $40,000 to $80.000 by getting a 5-year loan from bank of America. What type of financial decisions did MR. David take? - Will this decision result in Golden Cup to be excessively levered everything else remains unchanged? Show your calculations, knowing that industry average debt/equity ratio is 1. - Mc David is planning to use half of the long-term loan proceeds to increase Golden Cup inventory holdings, what type of financial decision is this? If nothing else changes, how would this decision affect Golden Cup liquidity

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