Excerpts from the 2013 statement of income statement of operations
Excerpts from the 2013 statement of income, statement of operations, and notes to the financial statements of High Liner Foods Inc. are in Exhibits 2-17A to C. Although it is a Canadian company based in Lunenburg, Nova Scotia, High Liner prepares its financial statements in U.S. dollars. However, the general format and accounting policies are similar to the financial statements you have seen so far.
Use the exhibits to answer the following questions.
a. In the shareholders’ equity section, what does the $80,260 thousand in common shares represent?
b. In the shareholders’ equity section, what does the $90,792 thousand in retained earnings represent?
c. What percentage of High Liner’s assets was financed by liabilities? Has this percentage increased or decreased from 2012?
d. How much did total assets increase in 2013 over 2012? What were the major areas (or accounts) that accounted for the increase?
e. If High Liner were to pay the income taxes payable, in the current liabilities section, what would be the effect on the basic accounting equation?
f. What was High Liner’s gross profit as percentage of revenues in 2013? How did this compare with 2012?
g. In the accompanying notes to the financial statements, High Liner discloses separately the revenues and cost of sales for its two business segments: Canadian and U.S. Calculate gross profit for each business segment as a percentage of revenues. Are the segments more or less profitable in 2013 than in 2012? Which segment is more profitable? Base your answers on High Liner’s note 19, Operating Segment Information (Exhibit 2-17C).
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