Fixed Assets 33 Income Critical Thinking In Finan
Module 02
Critical Thinking: Understanding Financial Statements and Cash Flow (100 Points)
Complete the following problems:
● Problem 2-1: Preparing Financial Statements
● Problem 2-2: Preparing the Statement of Cash Flows
You can access the problem details by clicking on Understanding Financial Statements and Cash Flow in your course.
Complete the problems in a Word document. Be sure to show your work to receive credit.
IMPORTANT
4 to 5 papers + cover page and references page
APA style (with headline every paragraph depend on what is required in the question
NO PLAGARESM
Module 2 Critical Thinking Assignment
Understanding Financial Statements and Cash Flow
Problem 2-1: Preparing Financial Statements
Information below is for Buraydah Manufacturing, Inc. for the year ended December 31, 20×1 except where beginning of year numbers indicated. All amounts in SAR unless otherwise stated. |
|
Accumulated depreciation |
2,817,000 |
Sales |
5,826,000 |
Accounts receivable |
233,000 |
Interest expense |
237,000 |
Cost of goods sold |
2,672,000 |
Short term notes payable |
195,000 |
Income taxes |
366,600 |
Inventories |
967,000 |
Common stock |
428,000 |
Dividends paid |
120,000 |
Cash |
986,500 |
Marketing, general and administrative expenses |
1,678,500 |
Long term debt |
5,844,000 |
Fixed assets (property & equipment) |
7,218,000 |
Accounts payable |
395,000 |
Other assets |
862,000 |
Depreciation expense |
422,000 |
Retained earnings at beginning of year |
419,600 |
Number of shares of common stock |
1,000 |
Using the information above: |
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1. Prepare an income statement in good form |
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2. Prepare end of year balance sheet in good form |
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3. Calculate net working capital |
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4. Calculate the debt ratio |
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Using an additional column for each financial statement: |
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5. Prepare a common sized income statement |
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6. Prepare a common sized balance sheet |
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Problem 2-2 Preparing Statement of Cash Flows |
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Given the following information, prepare a statement of cash flows. |
|
Dividends |
15 |
Increase in common stock |
22 |
Decrease in accounts receivable |
24 |
Increase in inventories |
35 |
Operating income |
80 |
Increase in accounts payable |
25 |
Interest expense |
25 |
Depreciation expense |
12 |
Increase in long term debt |
48 |
Increase in fixed assets |
33 |
Income taxes |
17 |
Beginning cash balance |
20 |
Assume all amounts are in 000’s SAR. |