SOLUTION: Creating Necessary Balance Sheets and Income Statement for ITech Geek Report Paper

Attached. Please let me know if you have any questions or need revisions.Corporate Finance Mid-Term QuestionsStudent’s NameCourseInstitutional AffiliationInstructor’s NameDateQUESTION 1Creating Necessary Balance Sheets and Income Statement for ITech GeekThere is no adequate information to solve this question. Therefore, we have tomake necessary assumptions so that we can create required balance sheets and incomestatements. However, we should choose our values selectively for the Annual Cash Flowfrom assets to range between $ 25,000,000 and $ 33,000,000 when making theassumption.In the question, I have considered the operating results to create the necessary balancesheets and Income statement for the company as:Sales = $ 96,333,334Costs = $18,000,000Depreciation expense = $5,000,000Interest expense = $3,000,000Dividends = $ 26,000,000At the beginning of the year2020:Net fixed assets: $30,000,000Current Assets: $22,000,000Current Liabilities: $8,000,000At the end of the year2020:Net fixed assets: $30,000,000Current Assets: $36,000,000Current Liabilities: $12,000,000The tax rate was 25 percentITech Geek 2020 Income statementSales$ 96,333,334Cost of goods sold$ 10,000,000Selling & administrative$ 8,000,000Depreciation$ 5,000,000EBIT$ 73,333,334Interest$ 3,000,000EBT$ 70,333,334Taxes (25%)$ 17,583,334Net Income$ 52,750,000Dividends$ 26,375,000Addition to retained earnings$ 26,375,000ITech Geek Balance Sheet at the end of the Year 2019Cash$ 7,000,000Accounts receivable $ 9,000,000Accounts payable$ 3,000,000Inventory$ 6,000,000Notes payable$ 5,000,000Current assets$ 22,000,000Current liabilities$ 8,000,000Net fixed assets$ 30,000,000Long-term debt$ 5,000.000Owner’s Equity$ 15,000,000Total assets$ 52,000,000Total liabilities & owner’s equity $ 28,000,000ITech Geek Balance Sheet at the end of 2020Cash$ 14,000,000Accounts receivable $ 12,000,000Accounts payable$ 5,000,000Inventory$ 10,000,000Notes payable$ 7,000,000Current assets$ 36,000,000Current liabilities$ 12,000,000Net fixed assets$ 30,000,000Long-term debt$ 10,000.000Owner’s Equity$ 20,000,000Total assets$ 66,000,000Total liabilities & owner’s equity $ 42,000,000Understanding the Income StatementWhen valuing a company, the income statement is an essential tool in analyzing acompany. In order …

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