Problems 1. Using the data presented below: Big Rock Candy Mountain Mining Co. Income Statements For the Years 2015 and 2016 Sales 2016 $369,300 2015 $354,000 Cost of Goods 285,400 281,800 Gross Profit 83,900 72,200 Depreciation 26,820 26,360 Selling & Admin. Expense 23,340 21,820 Other Operating Expense 1,080 1,080 Net Operating Income 32,660 22,940 Interest Expense 7,685 7,505 Earnings Before Taxes 24,975 15,435 Taxes 9,990 6,174 Net Income $14,985 $9,261 Notes: Tax Rate Shares Earings per Share 40.00% 40.00% 52,100 52,100 $0.29 $0.18 Big Rock Candy Mountain Mining Co. Balance Sheet For the Year Ended December 31, 2016 2016 2015 Assets Cash $14,714 $10,300 Marketable Securities $1,841 $550 Accounts Receivable $41,090 $42,100 Inventory $46,910 $48,490 Total Current Assets $104,555 $101,440 Gross Fixed Assets $388,000 $352,600 Accumulated Depreciation $78,020 $51,200 Net Plant & Equipment $309,980 $301,400 Total Assets $414,535 $402,840 Liabilities & Owner's Equity Accounts Payable $35,200 $32,700 Accrued Expenses $2,850 $2,740 Total Current Liabilities $38,050 $35,440 Long-term Debt $152,700 $158,600 Total Liabilities $190,750 $194,040 Common Stock ($1.00 par) $52,100 $52,100 Additional Paid-in-Capital $121,500 $121,500 Retained Earnings $50,185 $35,200 Total Owner's Equity $223,785 $208,800 Total Liab. & Owner's Equity $414,535 $402,840 a. Recreate the income statement and balance sheet using formulas wherever possible. Each statement should be on a separate worksheet. Try to duplicate the formatting exactly. b. On another worksheet, create a statement of cash flows for 2016. Do not enter any numbers directly on this worksheet. All formulas should be linked directly to the source on previous worksheets. c. Using Excel's outlining feature, create an outline on the statement of cash flows that, when collapsed, shows only the subtotals for each section. d. Suppose that sales were $400,000 in 2016 rather than $369,300. What is the 2016 net income and retained earnings? e. Undo the changes from part d, and change the tax rate to 35%. What is the 2016 net income and retained earnings? 2. Using the data from the previous problem: a. Create a common-size income statement for 2015 and 2016. This statement should be created on a separate worksheet with all formulas linked directly to the income statement. b. Create a common-size balance sheet for 2015 and 2016. This statement should be created on a separate worksheet with all formulas linked directly to the balance sheet. c. Create a common-size statement of cash flows for 2016 that can be switched between using sales and the 2015 cash balance in the denominator. 3. Download the file named "Chapter 2 Problem 3.xlsx" from the text support Web site. (www.cengagebrain.com) a. Fill in the blanks on the financial statements for Winter Park Web Design with formulas. Some of the formulas will require links to data given in other worksheets in the workbook. b. Create a common-size income statement and balance sheet using your answers from above. Using the techniques you have learned in this chapter, you should be able to do these statements in less than one minute with formatting that is identical to the original worksheets.