Professional Documents
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4. 5. 6. 7.
*Liabilities are determined by either adding current ($460,464,000) and long term liabilities ($109,708,000) or by solving the accounting equation: Assets ($1,987,484,000) = Liabilities + Stockholders Equity ($1,417,312,000) CP12. 1. Net income was $116,206 thousand or $116,206,000 for the year ended January 31, 2007. This is disclosed on the income statement. The instructor should note that the reported numbers are in thousands. Some students will erroneously report income as $116,206. Students should also be warned that different companies often use different terminologysome companies may use the term net earnings to describe net income. 2. 3. 4. 5. Net sales were $1,224,717,000. This is also disclosed on the income statement. Inventory is $154,387,000. This is disclosed on the balance sheet. Cash and cash equivalents decreased by $22,645,000 during the year. This amount can be computed from the balance sheet or it can be found on the statement of cash flows.
The auditor is Deloitte & Touche, LLP. This is found on the auditors report (in this case, called the report of independent registered public accounting firm).
CP13. 1. American Eagle Outfitters had total assets of $1,987,484,000 at the end of the most recent year, whereas Urban Outfitters had total assets of $899,251,000. Clearly American Eagle Outfitters is the larger of the two companies in terms of total assets at the end of the most recent year. 2. Urban Outfitters had net sales of $1,224,717,000 in the most recent year, while American Eagle Outfitters had greater net sales in the amount of $2,794,409,000. Again, American Eagle Outfitters is the larger of the two companies in terms of net sales. 3. In the most recent year, Urban Outfitters had growth in total assets of ($899,251,000 - $769,205,000)/ ($769,205,000) = 16.9%, but American Eagle Outfitters had higher growth in total assets of ($1,987,484,000 $1,605,649,000)/($1,605,649,000) = 23.8%. Similarly, Urban Outfitters had growth in net sales of ($1,224,717,000 - $1,092,107,000)/($1,092,107,000) = 12.1%, but American Eagle Outfitters had greater growth in net sales of ($2,794,409,000 - $2,321,962,000)/($2,321,962,000) = 20.3%. By both measures, American Eagle Outfitters is growing faster.
CP14. (continued) Req. 2Financial Statements: PERFORMANCE CORPORATION Income Statement For the Year Ended December 31, 2009 Revenues: Sales Services Total revenues Expenses: Cost of goods sold Selling expenses Depreciation expense Salaries and wages Total expenses (excluding income tax) Pretax income Income tax expense (25% x $40,000) Net income $175,000 $227,000 $ 90,000 25,000 10,000 187,000 10,000 $40,000 $30,000
52,000
62,000
PERFORMANCE CORPORATION Balance Sheet At December 31, 2009 Assets: Cash Merchandise inventory (for resale) Supplies inventory (for use in rendering services) Accounts receivable (from customers) Service vehicles Less accumulated depreciation Total assets Liabilities: Accounts payable (to suppliers) Note payable (to bank) Total liabilities Stockholders' equity: Contributed capital, 6,500 shares Retained earnings Total stockholders' equity Total liabilities and stockholders' equity
$ 32,000
95,000