The comparative financial statements prepared at December 31, Year 2, for Goldfish Company showed the following...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The comparative financial statements prepared at December 31, Year 2, for Goldfish Company showed the following summarized data: Statement of Earnings Year 2 Year 1 Sales revenue Cost of sales $356,820* $300,000 294,100 Gross margin 246,000 62,720 54,000 Operating expenses and interest expense 42,850 38,200 Earnings before income taxes 19,870 15,800 Income tax expense 8,190 6,300 Net earnings $ 11,680 $ 9,500 Statement of Financial Position Cash $ 4,060 $ 8,000 Accounts receivable (net) Inventory Property, plant, and equipment (net) Current liabilities (no interest) Non-current liabilities (10% interest) Common shares (6,000 shares) Retained earningst $ 14,320 $ 16,700 41,710 38,700 30,000 23,780 30,000 17,600 $ 109,810 $103,000 14,290 17,000 41,410 36,000 50,050 42,000 $ 109,810 $103,000 *One-third was credit sales. During Year 2, cash dividends amounting to $5,500 were declared and paid. Required: 1. Complete the following columns for each item in the preceding comparative financial statements (Negative answers should be indicated by a minus sign. Round percentage answers to 2 decimal places (i.e., 0.1243 should be entered as 12.43).): Increase (Decrease) Year 2 over Year 1 Amount Percentage Statement of earnings: Sales revenue Cost of sales Gross margin Operating expenses and interest expense Earnings before income taxes Income tax expense Net earnings Statement of financial position: Cash Accounts receivable (net) Inventory Property, plant, and equipment (net) Current liabilities Long-term debt Common shares Retained earnings 2-a. By what amount did working capital change? Change in working capital 2-b. What was the percentage change in the income tax rate? (Round intermediate calculations and final answer to 2 decimal places.) Percentage change % Statements of Financial Position 2020 2019 Cash $ 89 $ 69 Accounts receivable 36 26 Merchandise inventory 29 34 Long-term investments 20 Property, plant, and equipment 209 156 Accumulated depreciation (83 (94) Total assets $280 $211 Accounts payable $ 26 40 Income taxes payable 4 5 Long-term borrowings 86 26 Contributed capital 128 110 Retained earnings Total liabilities and shareholders' 36 30 $280 $211 equity Statement of Earnings Sales $145 Cost of sales (87) Gross profit 58 Depreciation expense Other operating expenses Earnings from operations Gain on sale of investments Loss on sale of equipment Earnings before income tax Income tax expense Net earnings (10) (37) 11 5 (2) 14 5 $ 9 Additional information is as follows: a. Old equipment was sold for cash during 2020. It had an original cost of $30 and an accumulated depreciation of $21. b. A new building was acquired during the year in exchange for a long-term note for $60, payable in five years. In addition, new equipment was purchased for cash. Required: 1. Prepare the operating activities section of the statement of cash flows for Laporte Inc. for the year ended December 31, 2020 by using the indirect method. (Negative answers should be indicated by a minus sign. Enter your answers in millions.) LAPORTE INC. Statement of Cash Flows (Partial) For the Year Ended December 31, 2020 Cash flows from operating activities: Add (deduct) items not affecting cash: Net cash used for operating activities $ 0 2. Prepare the investing activities section of the statement of cash flows for Laporte Inc. for the year ended December 31, 2020. (Negative answers should be indicated by a minus sign. Enter your answers in millions.) LAPORTE INC. Statement of Cash Flows (Partial) For the Year Ended December 31, 2020 Cash flows from investing activities: Net cash flow from investing activities $ 0 3. Compute each of the following for the year 2020: (a) quality of earnings ratio, (b) capital expenditures ratio, and (c) free cash flow. (Negative answers should be indicated by a minus sign. Round "Ratio" answers to 2 decimal places.) Quality of earnings (a) ratio Capital expenditures (b) ratio (c) Free cash flow 4. Based on your answers to (1.) and (2.) above, determine the net cash flow from financing activities. (Hint: This can be done without preparing the financing activities section of the statement.) (Enter your answer in millions.) Cash flow from financing activities 5. The president of Laporte Inc., Tanya Turcotte, was provided with a copy of the operating activities section of the statement of cash flows that you prepared in (1.), and made the following comment: "This report is supposed to show operating cash inflows and outflows during the year, but I don't see how much cash Laporte Inc. received from customers and how much it paid to trade suppliers and for income taxes. Please ask whoever prepared this statement to provide me with these numbers." Based on Tanya's comment, compute the following amounts for 2020: (Enter your answers in millions.) a. Cash collected from customers b. Cash paid to trade suppliers c. Cash paid for income taxes 2-c. What was the amount of cash collections from customers in year 2? Amount of cash inflow 2-d. What was the percentage change for the markup realized on sales? (Round intermediate calculations and final answer to 1 decimal place.) Percentage change % The comparative financial statements prepared at December 31, Year 2, for Goldfish Company showed the following summarized data: Statement of Earnings Year 2 Year 1 Sales revenue Cost of sales $356,820* $300,000 294,100 Gross margin 246,000 62,720 54,000 Operating expenses and interest expense 42,850 38,200 Earnings before income taxes 19,870 15,800 Income tax expense 8,190 6,300 Net earnings $ 11,680 $ 9,500 Statement of Financial Position Cash $ 4,060 $ 8,000 Accounts receivable (net) Inventory Property, plant, and equipment (net) Current liabilities (no interest) Non-current liabilities (10% interest) Common shares (6,000 shares) Retained earningst $ 14,320 $ 16,700 41,710 38,700 30,000 23,780 30,000 17,600 $ 109,810 $103,000 14,290 17,000 41,410 36,000 50,050 42,000 $ 109,810 $103,000 *One-third was credit sales. During Year 2, cash dividends amounting to $5,500 were declared and paid. Required: 1. Complete the following columns for each item in the preceding comparative financial statements (Negative answers should be indicated by a minus sign. Round percentage answers to 2 decimal places (i.e., 0.1243 should be entered as 12.43).): Increase (Decrease) Year 2 over Year 1 Amount Percentage Statement of earnings: Sales revenue Cost of sales Gross margin Operating expenses and interest expense Earnings before income taxes Income tax expense Net earnings Statement of financial position: Cash Accounts receivable (net) Inventory Property, plant, and equipment (net) Current liabilities Long-term debt Common shares Retained earnings 2-a. By what amount did working capital change? Change in working capital 2-b. What was the percentage change in the income tax rate? (Round intermediate calculations and final answer to 2 decimal places.) Percentage change % Statements of Financial Position 2020 2019 Cash $ 89 $ 69 Accounts receivable 36 26 Merchandise inventory 29 34 Long-term investments 20 Property, plant, and equipment 209 156 Accumulated depreciation (83 (94) Total assets $280 $211 Accounts payable $ 26 40 Income taxes payable 4 5 Long-term borrowings 86 26 Contributed capital 128 110 Retained earnings Total liabilities and shareholders' 36 30 $280 $211 equity Statement of Earnings Sales $145 Cost of sales (87) Gross profit 58 Depreciation expense Other operating expenses Earnings from operations Gain on sale of investments Loss on sale of equipment Earnings before income tax Income tax expense Net earnings (10) (37) 11 5 (2) 14 5 $ 9 Additional information is as follows: a. Old equipment was sold for cash during 2020. It had an original cost of $30 and an accumulated depreciation of $21. b. A new building was acquired during the year in exchange for a long-term note for $60, payable in five years. In addition, new equipment was purchased for cash. Required: 1. Prepare the operating activities section of the statement of cash flows for Laporte Inc. for the year ended December 31, 2020 by using the indirect method. (Negative answers should be indicated by a minus sign. Enter your answers in millions.) LAPORTE INC. Statement of Cash Flows (Partial) For the Year Ended December 31, 2020 Cash flows from operating activities: Add (deduct) items not affecting cash: Net cash used for operating activities $ 0 2. Prepare the investing activities section of the statement of cash flows for Laporte Inc. for the year ended December 31, 2020. (Negative answers should be indicated by a minus sign. Enter your answers in millions.) LAPORTE INC. Statement of Cash Flows (Partial) For the Year Ended December 31, 2020 Cash flows from investing activities: Net cash flow from investing activities $ 0 3. Compute each of the following for the year 2020: (a) quality of earnings ratio, (b) capital expenditures ratio, and (c) free cash flow. (Negative answers should be indicated by a minus sign. Round "Ratio" answers to 2 decimal places.) Quality of earnings (a) ratio Capital expenditures (b) ratio (c) Free cash flow 4. Based on your answers to (1.) and (2.) above, determine the net cash flow from financing activities. (Hint: This can be done without preparing the financing activities section of the statement.) (Enter your answer in millions.) Cash flow from financing activities 5. The president of Laporte Inc., Tanya Turcotte, was provided with a copy of the operating activities section of the statement of cash flows that you prepared in (1.), and made the following comment: "This report is supposed to show operating cash inflows and outflows during the year, but I don't see how much cash Laporte Inc. received from customers and how much it paid to trade suppliers and for income taxes. Please ask whoever prepared this statement to provide me with these numbers." Based on Tanya's comment, compute the following amounts for 2020: (Enter your answers in millions.) a. Cash collected from customers b. Cash paid to trade suppliers c. Cash paid for income taxes 2-c. What was the amount of cash collections from customers in year 2? Amount of cash inflow 2-d. What was the percentage change for the markup realized on sales? (Round intermediate calculations and final answer to 1 decimal place.) Percentage change %
Expert Answer:
Related Book For
Financial Accounting
ISBN: 978-1259103285
5th Canadian edition
Authors: Robert Libby, Patricia Libby, Daniel Short, George Kanaan, M
Posted Date:
Students also viewed these finance questions
-
According to the results of Study 2, as distance from the power plant decreases: F. Sulfur levels decrease. G. Sulfur and NO 2 levels increase. H. NO 2 and O 2 levels decrease. J. CO 2 and O 2 levels...
-
Find the Fourier transform of f(x) Show details. f(x) = f(x) 2ix if -1 < x < 1 0 otherwise f1 if a 0 f(x) = lo f(x) = { otherwise 0 e if a < x < a
-
What have researchers found about the use of job costing to record the cost of handproducing a bound book?
-
Do you think these code of conduct principles would be different for companies operating in different countries? Why?
-
Aysha's Cash Book showed a bank overdraft of Rs. 60,000 on 31" March, 2020. On Comparison of the two books, the following differences were noted down. a. A cheque for 3,000 deposited on 30th March,...
-
A model of a thin streamlined body is placed in a flow for testing. The body is \(0.9 \mathrm{~m}\) long and the flow velocity is \(0.6 \mathrm{~m} / \mathrm{s}\). What \(u\) is needed to ensure that...
-
The price elasticity of demand for a textbook sold in the United States is estimated to be 2.0, whereas the price elasticity of demand for books sold overseas is 3.0. The U.S. market requires...
-
When purchasing an investment that already broke even, does the new investor start a new break-even analysis for the cost of buying the company? For example, if I brought a company for $100,000,...
-
es Differences in Political Systems Political systems, the systems of government in nations, differ from country to country. It is important to understand the nature of different political systems...
-
List and explain the major business strategies.
-
Compare the advantages of buying an existing business and starting it up from zero.
-
What are the two approaches to estimate the value of a business? List the methods of estimation in each approach.
-
Explain with an example Reilly's Law of Retail Gravitation.
-
What is the capitalized earning value, and how is the projected earnings needed in this method calculated?
-
Write a paper that has the following three components: 1) An assessment of Throxs SCM performance during FY 2015 The evaluation of Throxs FY 2015 SCM performance should include discussion of: ...
-
The domain of the variable in the expression x 3/x + 4 is________.
-
A system, consisting of \(2 \mathrm{~mol}\) of \(\mathrm{N}_{2}, 5 \mathrm{~mol}\) of \(\mathrm{H}_{2}\) and \(2 \mathrm{~mol}\) of \(\mathrm{NH}_{3}\) initially, is undergoing the following...
-
The following reaction takes place in a system consisting of \(3 \mathrm{~mol} \mathrm{CH}_{4}, 5 \mathrm{~mol} \mathrm{H}_{2} \mathrm{O}\), \(1 \mathrm{~mol} \mathrm{CO}\) and \(4 \mathrm{~mol}...
-
The study of thermodynamics enables us to understand (a) Whether the transformation of energy is feasible or not (b) To what extent the transformation will take place (c) In which direction the...
Study smarter with the SolutionInn App