Please complete the exercises in Word or Excel
You are asked by a Swedish company that assembles computers to draw up a
by-nature and by-function income statement for year n. You are provided with the following
Retail price of a PC: €1500.
Cost of various components:
Parts Price Opening inventory Closing inventory
Case 50 5 13
Motherboard 200 8 2
Processor 300 4 11
Memory 100 6 4
Graphic card 50 1 13
Hard disk 150 5 10
Screen 200 3 3
DVD combo 50 7 19
Over the financial period, the company paid out €60 000 in salaries and social security
contributions of 50% of that amount. The company produced 240 PCs. Closing stock of
finished products was 27 units and opening stock 14 units.
At the end of the financial period, the manager of the company sells the premises that he
had bought for €200 000 three years ago (which was depreciated over 40 years) for €230
000, it now occupies old premises that are fully depreciated, and pays off a €12 000 loan
on which the company was paying interest at 5%. What impact do these transactions have
on EBITDA, operating profit and net income? Tax is levied at a rate of 35%.
Over the course of the financial period, by how much did the company/the lenders/the
company manager (who owns 50% of the shares) get richer/poorer?
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