ACCY 206 Chapter Notes - Chapter 13: Current Liability, Financial Statement, Income Statement
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I am doing research for an internship course I am taking for myAccounting degree.
I was tasked with researching the average cost of completing alist of financial reports. I realize that this cost would varydepending upon the size of the company the reports are beingcompleted for as well as the size of the firm doing the reports. Iwas wondering if you would be able to provide me with some averagepricing information for the following reports. I know these will bevery loose estimates without much information to go on but any helpwould be greatly appreciated.
Task List andResponsibilities- KaplanConsulting- | Recurrence | AVG Cost |
Create General Ledger Report at month end | Monthly | |
Create Trial Balance at month end | Monthly | |
Create Balance Sheet and Income Statemen | Monthly | |
Create Statement of Owner’s Equity | Monthly | |
Calculate the entries that would be involved in the closing ofthe period. Format: Revenue Income Summary Income Summary Each ExpenseAccount Income Summary Owner’s Capital(Amount of Net Inc) *If Net Loss, reverse the order (DR Capital & CR IncomeSummary) Add at the bottom whether net income or loss | Monthly | |
Perform Vertical/Horizontal Analysis | Monthly | |
Quarter to Date Comparisons | Monthly | |
Perform Ratio Analysis | Monthly | |
Prepare Future Year’s Budget | Quarterly | |
Create a Current Month-to-Date Trial Balance | Weekly | |
Analyze actuals vs. forecasted budgets to determine variances& make recommendations | Monthly | |
Create a 12 Month Statement of Cash Flows | Monthly to Practice | |
Review dept processes for better efficiency | Anytime |
Oak Industries, Inc is a manufacturer of radio and cable TVequipment. It also operates subscription TV systems. At one timeOak had a military contract, the loss of which was not disclosed inthe financial statements. The government, subject to a customs dutyaudit, is claiming $4 million due it. Oak officials have had atarget earnings per share amount of $.25 per share.
The financial statements, without footnotes, are included in thefollowing two pages. Using the financial information available andthe information above, answer the following questions:
1) Prepare a vertical analysis for both the balance sheet andthe statement of income
2) Prepare a horizontal analysis for both the balance sheet andthe statement of income
3) What ratios might be of some use in analyzing these financialstatements?
4) Using the ratios identified in #3 above, what trends appearto be out of line?
5) Other than failure to disclose the loss of the governmentcontract, can you identify any potential fraudulent, misleading oromitted information from your analysis in number 1-4 above?
6) If your answer to #5 is yes, can you quantify the amount ofthe potential misstatement?
Oak Industries, Inc
Unaudited consolidated Financial Statements
(000’s Omitted)
Balance Sheet
Balance Sheet | 12/31/X1 | 12/31/X2 |
ASSETS | ||
Cash | $10,304 | $12,683 |
Marketable Securities | 66,676 | 33,235 |
Accounts Receivable | 104,953 | 131,017 |
Inventories | 106,569 | 127,305 |
Prepaid Income Taxes | 10,762 | 24,461 |
Total Current Assets | 299,264 | 328,701 |
Fixed Assets | 248,991 | 277,493 |
Accumulated Depreciation | (70,640) | (99,789) |
Notes Receivable | 10,983 | 13,368 |
Intangible Assets (net) | 78,918 | 57,946 |
Investments | 27,323 | 34,164 |
Other Assets | 14,480 | 24,297 |
310,055 | 307,479 | |
Total Assets Liabilities & equity | $609,319 | $636,180 |
Notes Payable | $70,758 | $8,846 |
Accounts Payable | 35,053 | 31,430 |
Accrued Liabilities | 47,765 | 54,857 |
Current Portion LTD | 8,889 | 5,391 |
Subscriber Deposits | 17,502 | 15,378 |
Total Current Liabilities | 179,967 | 115,902 |
Long-Term Debt | 141,744 | 238,417 |
Other L/T Liabilities | 25,325 | 27,746 |
167,069 | 266,163 | |
Common Stock | 16.363 | 16,402 |
Preferred Stock | 72 | 54 |
Capital Surplus | 158,890 | 159,281 |
Retained Earnings | 89,761 | 89,932 |
Currency Adjustments | (2,757) | (11,521) |
Treasury Stock | (46) | (33) |
Total Liabilities & Equity | $609,319 | $636,180 |
Statement of Income
Statement of Income | 12/31/X1 | 12/31/X2 |
Net Sales | $507,119 | $545,720 |
Cost of Goods Sold | 338,682 | 410,209 |
Gross Margin | 168,437 | 135,511 |
General Expenses | 107,707 | 125,982 |
Operation Income | 60,730 | 9,529 |
Other Income | 15,944 | 10,659 |
Interest Expense | 25,430 | 30,170 |
Minority Interests | 8,986 | 3,075 |
Income Taxes (Benefit) | 11,908 | (17,160) |
(30,380) | (5,426) | |
Net Income | $30,350 | $4,103 |
Earnings Per Share | $2.01 | $0.25 |