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Swayers Corporation recently reported the the following 2019 balance sheet and 2019 income statement

For the coming year, the company's CFO has assembled this information:

- The company is forecasting a 25% increase in sales

- It expects that its cost of goods sold, operating expenses, assets and current liabilities will increase at the same rate as sales

- Interest expense, long term debt and capital stock are expected to remain constant.

-Tax rate is expected to remain at 30%.

- No dividends will be declared.

1. Prepare the statement of cash flows for the year 2020 using the percent of sales method (estimation method)

SWAYERS CORPORATION
BALANCE SHEET
DECEMBER 31, 2019
ASSETS
CURRENT ASSETS
CASH	114,690
ACCOUNTS RECEIVABLE	1,000
INVENTORY	1,000
TOTAL CURRENT ASSETS	116,690
FIXED ASSETS
NET FIXED ASSETS	40,000
TOTAL ASSETS	156,690
LIABILITIES
CURRENT LIABILITIES
ACCOUNTS PAYABLE	2,000
NOTES PAYABLE
TOTAL CURRENT LIABILITIES	2,000
LONG TERM DEBT	13,000
TOTAL LIABILITIES	15,000
STOCKHOLDERS' EQUITY
CAPITAL STOCK	60,000
RETAINED EARNINGS, BEGINNING	32,130
ADD: NET INCOME (LOSS)	49,560
LESS: DIVIDENDS	-
RETAINED EARNINGS, END	81,690
TOTAL STOCKHOLDERS EQUITY	141,690
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY	156,690

SWAYERS CORPORATION
INCOME STATEMENT
FOR THE YEAR ENDED	DECEMBER 31, 2019
SALES (NET)	200,000
COST OF GOODS SOLD	100,000
GROSS PROFIT	100,000
LESS: OPERATING EXPENSES
SALARIES	12,000
GASOLINE/TRAVEL	2,000
UTILITIES	4,000
DEPRECIATION	10,000
TOTAL OPERATING EXPENSES	28,000
INCOME (LOSS) FROM OPERATIONS	72,000
LESS: INTEREST	1,200
INCOME BEFORE TAXES	70,800
LESS: TAXES (30%)	21,240
NET INCOME AFTER TAXES	49,560

SWAYERS CORPORATION
PROJECTED INCOME STATEMENT
FOR THE YEAR ENDED	DECEMBER 31, 2020
SALES (NET)	250,000
COST OF GOODS SOLD	125,000
GROSS PROFIT	125,000
LESS: OPERATING EXPENSES
SALARIES	15,000
GASOLINE/TRAVEL	2,500
UTILITIES	5,000
DEPRECIATION	12,500
TOTAL OPERATING EXPENSES	35,000
INCOME (LOSS) FROM OPERATIONS	90,000
LESS: INTEREST	1,200
INCOME BEFORE TAXES	88,800
LESS: TAXES (30%)	26,640
NET INCOME AFTER TAXES	62,160

SWAYERS CORPORATION
PROJECTED BALANCE SHEET
DECEMBER 31, 2020
ASSETS
CURRENT ASSETS
CASH	143,362.50
MARKETABLE SECURITIES	23,487.50
ACCOUNTS RECEIVABLE	1,250
INVENTORY	1,250
TOTAL CURRENT ASSETS	169,350
FIXED ASSETS
NET FIXED ASSETS	50,000
TOTAL ASSETS	219,350
LIABILITIES
CURRENT LIABILITIES
ACCOUNTS PAYABLE	2,500
NOTES PAYABLE	-
TOTAL CURRENT LIABILITIES	2,500
LONG TERM DEBT	13,000
TOTAL LIABILITIES	15,500
STOCKHOLDERS' EQUITY
CAPITAL STOCK	60,000
RETAINED EARNINGS, BEGINNING	81,690
ADD: NET INCOME (LOSS)	62,160
LESS: DIVIDENDS	-
RETAINED EARNINGS, END	143,850
TOTAL STOCKHOLDERS EQUITY	203,850
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY	219,350

PROJECTED STATEMENT OF CASH FLOWS FOR THE YEAR ENDING DECEMBER 31, 2020 + + -(+) -(+) -(+) +(-) +(-) Cash Flow From Operating Activities Net Income After Tax Add: Depreciation Expense Increase (decrease) in Accounts Receivable Increase (decrease) in Inventories Increase (decrease) in Other Current Assets Increase (decrease) in Accounts Payable Increase (decrease) in Accruals Increase (decrease) in Other Current Liabilities Total Cash Flow from Operating Activities Cash Flow From Investing Activities Increase (decrease) in Gross Fixed Assets Increase (decrease) in Investments Total Cash Flow From Investing Activities Cash Flow From Financing Activities Increase (decrease) in Short Term Debt Increase (decrease) in Long Term Debt Increase (decrease) in Capital Stock Dividends Paid (Withdrawals) Total Cash Flow From Financing Activities Change In Cash Add: Cash Beginning (January 1, 2020) Equals Cash Ending (December 31, 2020) -(+) +(-) +(-) (-)

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