Footnote Project

Ken Corporation Financial Statement Notes for year end December 31, 2012

Note 1

Business Profile- Ken Corp. is a publicly traded corporation engaging in the business of selling widgets in the area in which it is located.

Note 2

Inventories as of 12/31/2012 are $4,814,200, inventory is calculated using the lower of cost or market value, and uses the LIFO method of inventory accounting, the balance also reflects a write off of $300,000 due to obsolescence.

Note 3

Property, Plant & Equipment, net of depreciation stands at $6,310,000- All fixed assets are carried per GAAP requirements for cost, also note that all fixed assets are depreciated using the straight-line method, while our Leasehold improvements are depreciated using the sum of years method.

Note 4

Contingent Liability- Ken Corp. has a possible liability in the amount of $750,000 arising from an automobile accident involving Ken and another driver, the other driver is seeking damages of $800,000 and counsel has advised the company that it is reasonably possible for the other driver to be awarded anywhere between $500,000-$1,000,000, with $750,000 being the best estimate.

Note 5

Change in Estimates- In 2012 Ken Corp. determined the life of equipment will extend to 5 years vs. the previous estimate of 3 years, and determined this will have a material impact on levels of depreciation.

Note 6

In January, per our contractual obligation with our CEO, we sold him an additional 10,000 shares which will be dilutive(Assuming 2013 was a typo, regardless it says every year)

Note 7

On June 12, 2012 the company acquired Chris Corp. for $1,000,000 plus 40,000 shares of common valued at $600,000, using the acquisition method of accounting, it was determined that Ken Corp. paid more than fair value, thus creating Goodwill, we also note that this transaction may be dilutive.

Management Discussion and Analysis Section

Listed below are Contractual Obligations of Ken Corporation

Payments by period...