LaAnn Sands wants to conduct revenue breakeven analyses of Salza Technology Corporation for 2013. For 2013, the firm’s cost of goods sold is considered to be variable costs, and operating expenses are considered to be fixed cash costs. Depreciation expenses in 2013 are expected to be fixed costs. Interest expenses in 2013 are expected to be fixed costs. Calculate Salza’s EBDAT breakeven in terms of survival revenues for 2013. 1. Technology Corporation increased its sales from $375,000 in 2012 to $ 450,000 in2013as shown in the firm's income statements presented below. LaAnn Sands, CEO andfounder of the firm, expressed concern that the cash account and the firm's cash declinedsubstantially between 2012 and 2013. Salza's complete balance sheets are also shown.Ms. Sands is seeking your assistance in the preparation of a statement of cash flows forSalza Technology.SALZA TECHNOLOGY CORPORATION ANNUAL INCOME STATEMENT (IN $ THOUSANDS)20122013Net sales$375$450Less: Cost of goods sold-225-270Gross profit150180Less: Operating expenses-46-46Less: Depreciation-25-30Less: Interest-4-4Income before taxes75100Less: Income taxes-20-30Net income$ 55$ 70Cash dividends$17$20 BALANCE SHEETS AS OF DECEMBER 31 (IN $ THOUSANDS)20122013Cash$ 39$ 16Accounts receivables5080Inventories151204Total current assets240300Gross fixed assets200290Less: accumulated depreciation-95-125Net fixed assets105165Total assets$ 345$ 465Account payable$ 30$ 45Bank loan2027Accrued liabilities1023Total current liabilities6095Long-term debt1515Common stock85120Retained earnings185235Total liabilities and equity$ 345$ 465

The question requires preparation of cash flow statement for Salza Technologies

Answered: 1. Technology Corporation increased its…

Entrepreneurial Finance

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ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter4: Preparing And Using Financial Statements

Section: Chapter Questions

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LaAnn Sands wants to conduct revenue breakeven analyses of Salza Technology Corporation for 2013. For 2013, the firm’s cost of goods sold is considered to be variable costs, and operating expenses are considered to be fixed cash costs. Depreciation expenses in 2013 are expected to be fixed costs. Interest expenses in 2013 are expected to be fixed costs. Calculate Salza’s EBDAT breakeven in terms of survival revenues for 2013.

1. Technology Corporation increased its sales from $375,000 in 2012 to $ 450,000 in2013
as shown in the firm's income statements presented below. LaAnn Sands, CEO and
founder of the firm, expressed concern that the cash account and the firm's cash declined
substantially between 2012 and 2013. Salza's complete balance sheets are also shown.
Ms. Sands is seeking your assistance in the preparation of a statement of cash flows for
Salza Technology.
SALZA TECHNOLOGY CORPORATION ANNUAL INCOME STATEMENT (IN $ THOUSANDS)
2012
2013
Net sales
$375
$450
Less: Cost of goods sold
-225
-270
Gross profit
150
180
Less: Operating expenses
-46
-46
Less: Depreciation
-25
-30
Less: Interest
-4
-4
Income before taxes
75
100
Less: Income taxes
-20
-30
Net income
$ 55
$ 70
Cash dividends
$17
$20

BALANCE SHEETS AS OF DECEMBER 31 (IN $ THOUSANDS)
2012
2013
Cash
$ 39
$ 16
Accounts receivables
50
80
Inventories
151
204
Total current assets
240
300
Gross fixed assets
200
290
Less: accumulated depreciation
-95
-125
Net fixed assets
105
165
Total assets
$ 345
$ 465
Account payable
$ 30
$ 45
Bank loan
20
27
Accrued liabilities
10
23
Total current liabilities
60
95
Long-term debt
15
15
Common stock
85
120
Retained earnings
185
235
Total liabilities and equity
$ 345
$ 465

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