Base your answers to the following questions on the financial statements for Leons Furniture imited/Meubles Lon Lte

Base your answers to the following questions on the financial statements for Leon’s Furniture imited/Meubles Léon Ltée in Exhibits 1.27A to 1.27D. In the questions below, the year 2016 refers to Leon’s fiscal year that ends December 31, 2016, and the year 2015 refers to the prior fiscal year ended December 31, 2015.

EXHIBIT 1.27A Leon’s Furniture Limited’s 2016 Consolidated Statements of Financial Position

EXHIBIT 1.27B Leon’s Furniture Limited’s 2016 Consolidated Statements of Income

EXHIBIT 1.27C Leon’s Furniture Limited’s 2016 Consolidated Statements of Cash Flows

LEON’S FURNITURE LIMITED
Consolidated Statement of Cash Flows

EXHIBIT 1.27D Leon’s Furniture Limited’s 2016 Consolidated Statements of Changes in Shareholders’ Equity

Required

a. Determine the amount of dividends that Leon’s declared in 2016. On which financial statement(s) did you find this information?

b. Find the following amounts in the statements:

i. Revenue in 2016

ii. Cost of sales in 2016

iii. Gross profit (as a dollar amount and as a percentage) in 2016

iv. Selling, general, and administration expenses in 2016

v. Net finance costs in 2016

vi. Income tax expense in 2016

vii. Net income in 2015

viii. Inventories at the end of 2016

ix. Trade and other payables at the beginning of the 2016 fiscal year

x. Retained earnings at the end of 2016

xi. Loans and borrowings at the beginning of 2016 (include the current portion)

xii. Cash flows provided by operating activities in 2016

xiii. Cash payments to purchase property, plant, and equipment and investment properties in 2016

xiv. Cash payments for dividends in 2016

xv. Cash flows generated by (used in) financing activities in 2015

xvi. Cash payments to repay term loans in 2016

c. List the two largest sources of cash and the two largest uses of cash in 2016. (Consider operations

to be a single source or use of cash.)

d. Suggest two reasons why net earnings were $83,591 thousand in 2016, yet cash flows provided by operations were $164,648 thousand.

e. During 2016, total revenue was approximately $112,018 thousand higher than in 2015. However, net earnings in 2016 were only $6,962 thousand higher than in 2015. Examine the consolidated statements of income and explain where the additional revenue went.

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LEON'S FURNITURE LIMITED Consolidated Statement of Financial Position As at December 31 As at December 31 ($ in thousands) 2016 2015 ASSETS Current assets $ 43,985 Cash and cash equivalents (NOTES S AND 22) 7,859 Restricted marketable securities (NOTE 22) 16,600 18,691 Available-for-sale financial assets (NOTE 22] 39,079 22,960 Trade receivables (NOTE 22) 128,142 117,832 Income taxes receivable 2,042 24,920 Inventories (NOTE 6) 308,801 303,961 Deferred acquisition costs (NOTE 7) 7,643 8,329 Deferred financing costs 473 775 $ 547,067 $ 505,025 Total current assets Other assets 8,225 6,214 Deferred acquisition costs (NOTE 7) 13,128 13,093 Property, plant and equipment (NOTE 8] 315,500 323,218 Investment properties (NOTE 9) 18,496 17,984 Intangible assets (NOTE 10) 318,214 311,464 390,120 Goodwill (NOTE 10) 390,120 Deferred income tax assets (NOTE 20] 8,174 9,083 Total assets $1,611,662 $1,583,463 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities $ 214,838 $ 206,076 Trade and other payables (NOTE 11) Provisions (NOTE 12) 5,468 5,343 Income taxes payable 12,641 7,266 Customers' deposits 117,990 112,446 Finance lease liabilities (NOTE 13] 1,421 1,954 Dividends payable (NOTE 16) 7,183 7,141 Deferred warranty plan revenue 39,839 49,380 As at December 31 As at December 31 ($ in thousands) 2016 2015 Loans and borrowings (NOTE 14] 25,000 50,000 Other liabilities 2,124 Total current liabilities $ 426,504 $ 439,606 Loans and borrowings (NOTE 14] 214,436 237,357 Convertible debentures (NOTE 14) 93,520 92,628 Finance lease liabilities (NOTE 13] 10,474 11,895 Deferred warranty plan revenue 105,289 95,775 Redeemable share liability (NOTE 15) 503 880 Deferred rent liabilities and lease inducements 11,380 8,858 Deferred income tax liabilities (NOTE 20] 90,003 96,062 $ 952,109 $ 983,061 Total liabilities Shareholders' equity attributable to the shareholders of the Company $ 39,184 7,089 Common shares (NOTE 16] 34,389 Equity component of convertible debentures (NOTE 14) 7,089 Retained earnings 613,426 558,526 Accumulated other comprehensive (loss) income (146) $ 659,553 398 Total shareholders' equity $ 600,402 Total liabilities and shareholders' equity $1,611,662 $1,583,463