Your Name Here

Please Type your answers in the
Yellow Boxes
Do not type anything in these
(Blue) boxes

Problem 1 – 30 points

Use the following
information to complete the income statement for Company A for the year ending December 31,
2013 (show work):

Income Statement Information

Revenue
############

Gross Margin
40.0%

Selling General and
Administrative (SG&A)
21.0%
of revenue

Research and Development
(R&D)
12.0%
of revenue

Depreciation expense (D&A)
$
5,000,000

Interest Expense
$
5,000,000

Interest Income
$
2,500,000

Tax Rate
35%

Securities Information

Weighted Average Shares
(12/31/13)
10,000,000

A Warrants exercisable @ $2.00
2,200,000

B Warrants exercisable @ $3.00
2,500,000

Stock Price (12/31/13)
$ 4.00

Complete the following Income
Statement

Answers go in the yellow boxes

Points

Revenue
############

$ 115,000,000

Cost of Goods Sold

1

Gross Profit

1

Operating Expenses

SG&A

1

R&D

1

D&A

Operating Expenses Total

1

Operating Income

5

Interest Expense, net

1

Pre Tax Income

1

Tax

1

Net Income

2

EPS Basic

5

EPS Diluted

10

Total Points
30

Use this table (below) to help
with your calculations

Diluted Share Calculations

Basic

A warrants

B warrants

Total

Proceeds

A warrants

B warrants

Total Proceeds

Shares repurchased

Diluted shares used to calculate Diluted EPS

Total Score
60