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: |
|
|
1. Prepare an income statement in good form |
|
|
2. Prepare end of year balance sheet in good form |
|
|
3. Calculate net working capital |
|
|
4. Calculate the debt ratio |
|
|
Using an additional column for each financial statement: |
|
|
5. Prepare a common sized income statement |
|
|
6. Prepare a common sized balance sheet |
|
|
Problem 2-2 Preparing Statement of Cash Flows |
|
|
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. |
|