PROBLEM 1:
The 2018 and 2019 comparative balance sheets and 2019 income statement for Edmond & Edmond Company appear below:
EDMOND & EDMOND COMPANY
Comparative Balance Sheet
December 31
2019 2018
Assets
Cash $ 26,000 $ 23,000
Accounts receivable 25,000 34,000
Merchandise inventory 32,000 15,000
Property, plant, and equipment 60,000 78,000
Accumulated depreciation (21,000) (24,000)
Total $122,000 $126,000
Liabilities and Stockholders' Equity
Accounts payable $ 18,000 $ 23,000
Income taxes payable 9,000 8,000
Notes payable (long-term) 8,000 33,000
Common stock 28,000 24,000
Retained earnings 59,000 38,000
Total $122,000 $126,000
EDMOND & EDMOND COMPANY
Income Statement
For the Year Ended December 31, 2019
Sales $400,000
Cost of goods sold 270,000
Gross profit 130,000
Operating expenses 45,000
Income from operations 85,000
Interest expense 5,000
Income before income taxes 80,000
Income tax expense 24,000
Net income $ 56,000
The following additional data were provided:
1. Dividends declared and paid were $35,000.
2. During the year, equipment was sold for $17,000 cash. This equipment cost $28,000 originally and had a book value of $17,000 at the time of sale.
3. Purchased a used delivery truck for $10,000
4. All depreciation expense is included the operating expenses.
5. All sales and purchases are on account.
6. Accounts payable pertain to merchandise suppliers.
REQUIREMENTS: Prepare 1 WORD document (WD1) and 1 EXCEL document (ED1):
1. (WD1)>>Write a brief, yet clear, paragraph about the purpose of a statement of cash flow .
Be specific.
2. (ED1)>>Prepare a statement of cash flows for Edmond & Edmond Company using the indirect
method. Be sure your statement is complete in form, includes all needed line-items, and is
accurate.
3. (WD1)>>Write a brief, yet thorough, email to Cisslee Williams (the Controller for Edmond and
Edmond) stating the overall conclusion you have drawn from the completed statement of cash
flows.
PROBLEM 2:
Find the official website for ONE of the following companies:
Coca-cola
Walmart
Tyson Foods
Once you find an official website for the company you select, perform the following tasks:
Find the âInvestor Relationsâ link and click. Once in âinvestor relations,â
Find the 2017 annual report OR 10-K Report to the SEC
After locating one of the documents, locate the financial statements included in the document.
Copy and paste the (1) comparative balance sheet, (2) income statement, and (3) statement of cash flows and include ALL three (3) in a separate file. Do not be concerned with the formatting once you have pasted. Just be sure the name of the company, name of the statement, and the years are clearly shown as proof that you have provided the required statements.
Now that you have access to the financial statements, compute the following ratios FOR TWO YEARS. Be sure to show ALL computations, equations, formulas, etc.:
Any two liquidity ratios
One solvency ratio
Any two profitability ratios
REQUIRED1: Write and submit a 1st document that:
>>>Identifies the name of the company on which you performed research
>>> Presents the ratios (e.g., a table) you have computed. Keep computations separate from final ratio answers. Be sure to clearly classify and identify all ratios. Show the computations. Neatness, order, and clarity are a MUST. Be sure your presentation is neat, orderly, and can be clearly followed.
>>>States YOUR conclusion about each of the three groups of ratios. Hint: A cover page is expected.
REQUIRED2: Write and submit a 2nd document that includes the financial statements you copied and pasted (as required in âdâ above. IF you can easily include your financial statements as pages in the 1st document, that will absolutely acceptable, and preferred.
PROBLEM 1:
The 2018 and 2019 comparative balance sheets and 2019 income statement for Edmond & Edmond Company appear below:
EDMOND & EDMOND COMPANY
Comparative Balance Sheet
December 31
2019 2018
Assets
Cash $ 26,000 $ 23,000
Accounts receivable 25,000 34,000
Merchandise inventory 32,000 15,000
Property, plant, and equipment 60,000 78,000
Accumulated depreciation (21,000) (24,000)
Total $122,000 $126,000
Liabilities and Stockholders' Equity
Accounts payable $ 18,000 $ 23,000
Income taxes payable 9,000 8,000
Notes payable (long-term) 8,000 33,000
Common stock 28,000 24,000
Retained earnings 59,000 38,000
Total $122,000 $126,000
EDMOND & EDMOND COMPANY
Income Statement
For the Year Ended December 31, 2019
Sales $400,000
Cost of goods sold 270,000
Gross profit 130,000
Operating expenses 45,000
Income from operations 85,000
Interest expense 5,000
Income before income taxes 80,000
Income tax expense 24,000
Net income $ 56,000
The following additional data were provided:
1. Dividends declared and paid were $35,000.
2. During the year, equipment was sold for $17,000 cash. This equipment cost $28,000 originally and had a book value of $17,000 at the time of sale.
3. Purchased a used delivery truck for $10,000
4. All depreciation expense is included the operating expenses.
5. All sales and purchases are on account.
6. Accounts payable pertain to merchandise suppliers.
REQUIREMENTS: Prepare 1 WORD document (WD1) and 1 EXCEL document (ED1):
1. (WD1)>>Write a brief, yet clear, paragraph about the purpose of a statement of cash flow .
Be specific.
2. (ED1)>>Prepare a statement of cash flows for Edmond & Edmond Company using the indirect
method. Be sure your statement is complete in form, includes all needed line-items, and is
accurate.
3. (WD1)>>Write a brief, yet thorough, email to Cisslee Williams (the Controller for Edmond and
Edmond) stating the overall conclusion you have drawn from the completed statement of cash
flows.
PROBLEM 2:
Find the official website for ONE of the following companies:
Coca-cola
Walmart
Tyson Foods
Once you find an official website for the company you select, perform the following tasks:
Find the âInvestor Relationsâ link and click. Once in âinvestor relations,â
Find the 2017 annual report OR 10-K Report to the SEC
After locating one of the documents, locate the financial statements included in the document.
Copy and paste the (1) comparative balance sheet, (2) income statement, and (3) statement of cash flows and include ALL three (3) in a separate file. Do not be concerned with the formatting once you have pasted. Just be sure the name of the company, name of the statement, and the years are clearly shown as proof that you have provided the required statements.
Now that you have access to the financial statements, compute the following ratios FOR TWO YEARS. Be sure to show ALL computations, equations, formulas, etc.:
Any two liquidity ratios
One solvency ratio
Any two profitability ratios
REQUIRED1: Write and submit a 1st document that:
>>>Identifies the name of the company on which you performed research
>>> Presents the ratios (e.g., a table) you have computed. Keep computations separate from final ratio answers. Be sure to clearly classify and identify all ratios. Show the computations. Neatness, order, and clarity are a MUST. Be sure your presentation is neat, orderly, and can be clearly followed.
>>>States YOUR conclusion about each of the three groups of ratios. Hint: A cover page is expected.
REQUIRED2: Write and submit a 2nd document that includes the financial statements you copied and pasted (as required in âdâ above. IF you can easily include your financial statements as pages in the 1st document, that will absolutely acceptable, and preferred.
Related questions
Flounder Companyâs income statement for the year ended December31, 2017, contained the following condensed information.
| Service revenue | $839,000 | |||
| Operating expenses (excluding depreciation) | $630,000 | |||
| Depreciation expense | 59,000 | |||
| Loss on sale of equipment | 26,000 | 715,000 | ||
| Income before income taxes | 124,000 | |||
| Income tax expense | 40,000 | |||
| Net income | $84,000 |
Flounderâs balance sheet contained the following comparative dataat December 31.
2017 | 2016 | |||
| Accounts receivable | $38,000 | $56,000 | ||
| Accounts payable | 42,000 | 31,000 | ||
| Income taxes payable | 4,100 | 8,000 |
(Accounts payable pertains to operating expenses.)
Prepare the operating activities section of the statement of cashflows using the direct method.
FLOUNDER COMPANY |
The comparative statements of financial position of Mikos Inc. as at December 31, 2017 and 2018, and its statement of earnings for the year ended December 31, 2018, are presented below:
| MIKOS INC. | ||||||
| Comparative Statements of Financial Position | ||||||
| December 31 | ||||||
| 2018 | 2017 | |||||
| Assets | ||||||
| Cash | $ | 10,600 | $ | 18,600 | ||
| Short-term investments | 72,200 | 40,800 | ||||
| Accounts receivable | 76,000 | 32,400 | ||||
| Inventories, at cost | 57,200 | 41,600 | ||||
| Prepaid expenses | 5,600 | 9,200 | ||||
| Land | 51,400 | 78,000 | ||||
| Property, plant, and equipment, net | 286,400 | 187,000 | ||||
| Intangible assets | 25,600 | 31,200 | ||||
| $ | 585,000 | $ | 438,800 | |||
| Liabilities and Shareholdersâ Equity | ||||||
| Accounts payable | $ | 18,600 | $ | 43,200 | ||
| Income tax payable | 9,200 | 2,600 | ||||
| Accrued liabilities | 11,600 | -0- | ||||
| Long-term notes payable | 126,000 | 182,000 | ||||
| Contributed capital | 232,000 | 68,000 | ||||
| Retained earnings | 187,600 | 143,000 | ||||
| $ | 585,000 | $ | 438,800 | |||
| MIKOS INC. | |||||
| Statement of Earnings | |||||
| For the Year Ended December 31, 2018 | |||||
| Sales | $ | 898,000 | |||
| Cost of sales | $ | 446,000 | |||
| Amortization expenseâintangible assets | 5,600 | ||||
| Depreciation expenseâproperty, plant, and equipment | 34,600 | ||||
| Operating expenses | 237,000 | ||||
| Interest expense | 13,600 | 736,800 | |||
| Earnings before income taxes | 161,200 | ||||
| Income tax expense | 48,360 | ||||
| Net earnings | $ | 112,840 | |||
| Additional information is as follows: | |
| a. | Land was sold for cash at its carrying amount. |
| b. | The short-term investments will mature in February 2019. |
| c. | Cash dividends were declared and paid in 2018. |
| d. | New equipment with a cost of $167,600 was purchased for cash, and old equipment was sold at its carrying amount. |
| e. | Long-term notes of $18,000 were paid in cash, and notes of $38,000 were converted to shares. |
| 1. | Prepare a statement of cash flows for Mikos Inc. for the year ended December 31, 2018 by using the indirect method. (Negative answers should be indicated by a minus sign.) |
