Principle of Account Questions 22

User Generated

Fjvsgxnl

Business Finance

Unformatted Attachment Preview

The ledger of Wainwright Company at the end of the current year shows Accounts Receivable $90,000; Credit Sales $916,000; and Sales Returns and Allowances $41,900. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) (a) If Wainwright uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Wainwright determines that Hiller’s $1,100 balance is uncollectible. (b) If Allowance for Doubtful Accounts has a credit balance of $1,000 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 12% of accounts receivable. (c) If Allowance for Doubtful Accounts has a debit balance of $1,000 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 9% of accounts receivable. No. Account Titles and Explanation Debit Credit (a) (b) (c) the following information was taken from the 2014 financial statements of FedEx Corporation, a major global transportation/delivery company. (in millions) Accounts receivable (gross) Accounts receivable (net) Allowance for doubtful accounts Sales revenue Total current assets 2014 $ 3,532 3,418 114 36,696 7,188 2013 $ 4,502 4,365 137 38,729 6,986 Answer each of the following questions. Calculate the accounts receivable turnover and the average collection period for 2014 for FedEx. (Round answers to 1 decimal place, e.g. 12.5. Use 365 days for calculation.) Accounts receivable turnover times The average collection period for 2014 days The financial statements of Tootsie Roll are presented below. TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF Earnings, Comprehensive Earnings and Retained Earnings (in thousands except per share data) For the year ended December 31, 2011 2010 2009 Net product sales $528,369 $517,149 $495,592 Rental and royalty revenue 4,136 4,299 3,739 Total revenue 532,505 521,448 499,331 Product cost of goods sold 365,225 349,334 319,775 Rental and royalty cost 1,038 1,088 852 Total costs 366,263 350,422 320,627 Product gross margin 163,144 167,815 175,817 Rental and royalty gross margin 3,098 3,211 2,887 Total gross margin 166,242 171,026 178,704 Selling, marketing and administrative expenses 108,276 106,316 103,755 Impairment charges — — 14,000 Earnings from operations 57,966 64,710 60,949 Other income (expense), net 2,946 8,358 2,100 Earnings before income taxes 60,912 73,068 63,049 Provision for income taxes 16,974 20,005 9,892 Net earnings $43,938 $53,063 $53,157 Net earnings Other comprehensive earnings (loss) Comprehensive earnings Retained earnings at beginning of year. Net earnings Cash dividends Stock dividends Retained earnings at end of year Earnings per share $43,938 (8,740) $35,198 $135,866 43,938 (18,360) (47,175) $114,269 $0.76 $53,063 1,183 $54,246 $53,157 2,845 $56,002 $147,687 53,063 (18,078) (46,806) $135,866 $144,949 53,157 (17,790) (32,629) $147,687 $0.90 $0.89 Average Common and Class B Common shares outstanding 57,892 58,685 (The accompanying notes are an integral part of these statements.) 59,425 CONSOLIDATED STATEMENTS OF Financial Position TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES (in thousands except per share data) Assets December 31, 2011 2010 CURRENT ASSETS: Cash and cash equivalents $78,612 $115,976 Investments 10,895 7,996 Accounts receivable trade, less allowances of $1,731 and $1,531 41,895 37,394 Other receivables 3,391 9,961 Inventories: Finished goods and work-in-process 42,676 35,416 Raw materials and supplies 29,084 21,236 Prepaid expenses 5,070 6,499 Deferred income taxes 578 689 Total current assets 212,201 235,167 PROPERTY, PLANT AND EQUIPMENT, at cost: Land Buildings Machinery and equipment Construction in progress Less—Accumulated depreciation Net property, plant and equipment OTHER ASSETS: Goodwill Trademarks Investments Split dollar officer life insurance Prepaid expenses Equity method investment Deferred income taxes Total other assets Total assets Liabilities and Shareholders’ Equity CURRENT LIABILITIES: Accounts payable Dividends payable Accrued liabilities Total current liabilities NONCURRENT LIABILITES: Deferred income taxes Postretirement health care and life insurance benefits Industrial development bonds Liability for uncertain tax positions Deferred compensation and other liabilities Total noncurrent liabilities SHAREHOLDERS’ EQUITY: Common stock, $.69-4/9 par value—120,000 shares authorized—36,479 and 36,057 respectively, issued Class B common stock, $.69-4/9 par value—40,000 shares authorized— 21,025 and 20,466 respectively, issued Capital in excess of par value Retained earnings, per accompanying statement Accumulated other comprehensive loss Treasury stock (at cost)—71 shares and 69 shares, respectively Total shareholders’ equity Total liabilities and shareholders’ equity 21,939 107,567 322,993 2,598 455,097 242,935 212,162 21,696 102,934 307,178 9,243 440,974 225,482 215,492 73,237 73,237 175,024 175,024 96,161 64,461 74,209 74,441 3,212 6,680 3,935 4,254 7,715 9,203 433,493 407,300 $857,856 $857,959 December 31, 2011 2010 $10,683 4,603 43,069 58,355 $9,791 4,529 44,185 58,505 43,521 26,108 7,500 8,345 48,092 133,566 47,865 20,689 7,500 9,835 46,157 132,046 25,333 25,040 14,601 14,212 533,677 114,269 (19,953) (1,992) 665,935 $857,856 505,495 135,866 (11,213) (1,992) 667,408 $857,959 TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF Cash Flows (in thousands) For the year ended December 31, 2011 2010 2009 CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings $43,938 $53,063 $53,157 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation 19,229 18,279 17,862 Impairment charges — — 14,000 Impairment of equity method investment — — 4,400 Loss from equity method investment 194 342 233 Amortization of marketable security premiums 1,267 522 Changes in operating assets and liabilities: Accounts receivable (5,448) 717 Other receivables 3,963 (2,373) Inventories (15,631) (1,447) Prepaid expenses and other assets 5,106 4,936 Accounts payable and accrued liabilities 84 2,180 Income taxes payable and deferred (5,772) 2,322 Postretirement health care and life insurance benefits 2,022 1,429 Deferred compensation and other liabilities 2,146 2,525 Others (708) 310 Net cash provided by operating activities 50,390 82,805 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (16,351) (12,813) Net purchase of trading securities (3,234) (2,902) Purchase of available for sale securities (39,252) (9,301) Sale and maturity of available for sale securities 7,680 8,208 Net cash used in investing activities (51,157) (16,808) CASH FLOWS FROM FINANCING ACTIVITIES: Shares repurchased and retired (18,190) (22,881) Dividends paid in cash (18,407) (18,130) Net cash used in financing activities (36,597) (41,011) Increase (decrease) in cash and cash equivalents (37,364) 24,986 Cash and cash equivalents at beginning of year 115,976 90,990 Cash and cash equivalents at end of year $78,612 $115,976 Supplemental cash flow information Income taxes paid $16,906 $20,586 Interest paid $38 $49 Stock dividend issued $47,053 $46,683 (The accompanying notes are an integral part of these statements.) 320 (5,899) (2,088) 455 5,203 (2,755) (12,543) 1,384 2,960 305 76,994 (20,831) (1,713) (11,331) 17,511 (16,364) (20,723) (17,825) (38,548) 22,082 68,908 $90,990 $22,364 $182 $32,538 Five Year Summary of Earning and Financial Hightlights TOOTISE ROLL. INDUSTRY, INC. AND SUBSIDIARIES (Thousands of dollars except per share, percentage and ratio figures) 2011 2010 2009 2008 2007 Sales and Earnings Data Net product sales $528,369 $517,149 $495,592 $492,051 $492,742 Product gross margin 163,144 167,815 175,817 158,055 165,456 Interest expenses 121 142 243 378 535 Provision for income taxes 16,974 20,005 9,892 16,347 25,401 Net earnings 43,938 53,063 53,157 38,880 52,175 % of net product sales 8.3% 10.3% 10.7% 7.9% 10.6% % of shareholders' equity 6.6% 8.0% 8.1% 6.1% 8.1% Per Common Share Data Net earnings $0.76 $0.90 $0.89 $0.65 $0.85 Cash dvidends declared 0.32 0.32 0.32 0.32 0.32 Stock dividends 3% 3% 3% 3% 3% Additional Financial Data Working capital Net cash provided by opreating activities Net cash provided by (used by) investing activities Net cash used in financing activities Property, plant & equipment additions $153,846 $176,662 $154,409 $129,694 $142,163 50,390 82,805 76,994 57,333 90,148 (51,157) (16,808) (16,364) (7,565) (43,429) (36,597) (41,011) (38,548) (38,666) (44,842) 16,351 12,813 20,831 34,355 14,767 Net property, plant & equipment Total assets Long-term debt Shareholders' equity Average shares outstanding 212,162 215,492 220,721 217,628 201,401 857,856 7,500 665,935 57,892 857,959 7,500 667,408 58,685 836,844 7,500 654,244 59,425 813,252 7,500 636,847 60,152 813,134 7,500 640,204 61,580 Notes to Consolidated Financial Statements ($ in thousands) Revenue recognition: Products are sold to customers based on accepted purchase orders which include quantity, sales price and other relevant terms of sale. Revenue, net of applicable provisions for discounts, returns, allowances and certain advertising and promotional costs, is recognized when products are delivered to customers and collectability is reasonably assured. Shipping and handling costs of $45,850, $43,034, and $38,628 in 2011, 2010 and 2009, respectively, are included in selling, marketing and administrative expenses. Accounts receivable are unsecured. Revenues from a major customer aggregated approximately 23.3%, 21.4% and 22.9% of net product sales during the years ended December 31, 2011, 2010 and 2009, respectively. SEGMENT AND GEOGRAPHIC INFORMATION: The Company operates as a single reportable segments encompassing the manufacturing and sale of confectionery products. Its principal manufacturing operations are located in the United States and Canada, and its principal market is in the United States. The Company also manufactures and sells confectionery products in Mexico, and exports products to Canada and countries worldwide. The following geographic data includes net product sales summarized on the basis of the customer location and long-lived assets based on their location: Net product sales: United states Foreign Long-lived assets: United states Foreign 2011 2010 2009 $487,185 41,184 $471,714 45,435 $455,517 40,075 $528,369 $517,149 $495,592 $170,173 41,989 $172,087 43,405 $176,044 44,677 $212,162 $215,492 $220,721 Calculate the accounts receivable turnover and average collection period for 2011. (Use “Net Product Sales.” Assume all sales were credit sales.) (Round answers to 1 decimal place, e.g. 15.2.) Accounts receivable turnover times Average collection period days The financial statements of The Hershey Company and Tootsie Roll are presented below. THE HERSHEY COMPANY CONSOLIDATED STATEMENTS OF INCOME For the years ended December 31, 2011 2010 2009 In thousands of dollars except per share amounts Net Sales $6,080,788 $5,671,009 $5,298,668 Costs and Expenses: Cost of sales 3,548,896 3,255,801 3,245,531 Selling, marketing and administrative 1,477,750 1,426,477 1,208,672 Business realignment and impairment (credits) charges, (886) 83,433 82,875 net Total costs and expenses 5,025,760 4,765,711 4,537,078 Income before Interest and Income Taxes 1,055,028 905,298 761,590 Interest expense, net 92,183 96,434 90,459 Income before Income Taxes 962,845 808,864 671,131 Provision for income taxes 333,883 299,065 235,137 Net Income $628,962 $509,799 $435,994 Net Income Per Share—Basic—Class B Common $2.58 $2.08 $1.77 Stock Net Income Per Share—Diluted—Class B Common $2.56 $2.07 $1.77 Stock Net Income Per Share—Basic—Common Stock $2.85 $2.29 $1.97 Net Income Per Share—Diluted—Common Stock $2.74 $2.21 $1.90 Cash Dividends Paid Per Share: Common Stock $1.3800 $1.2800 $1.1900 Class B Common Stock 1.2500 1.1600 1.0712 The notes to consolidated financial statements are an integral part of these statements and are included in the Hershey's 2011 Annual Report, available at www.thehersheycompany.com. THE HERSHEY COMPANY CONSOLIDATED BALANCE SHEETS December 31, In thousands of dollars ASSETS Current Assets: Cash and cash equivalents Accounts receivable—trade Inventories Deferred income taxes Prepaid expenses and other Total current assets Property, Plant and Equipment, Net Goodwill Other Intangibles Deferred Income Taxes Other Assets Total assets LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities: Accounts payable Accrued liabilities Accrued income taxes Short-term debt Current portion of long-term debt Total current liabilities Long-term Debt Other Long-term Liabilities Total liabilities Commitments and Contingencies Stockholders’ Equity: 2011 2010 $693,686 399,499 648,953 136,861 167,559 2,046,558 1,559,717 516,745 111,913 38,544 138,722 $4,412,199 $884,642 390,061 533,622 55,760 141,132 2,005,217 1,437,702 524,134 123,080 21,387 161,212 $4,272,732 $420,017 612,186 1,899 42,080 97,593 1,173,775 1,748,500 617,276 3,539,551 — $410,655 593,308 9,402 24,088 261,392 1,298,845 1,541,825 494,461 3,335,131 — The Hershey Company Stockholders’ Equity Preferred Stock, shares issued: none in 2011 and 2010 Common Stock, shares issued: 299,269,702 in 2011 and 299,195,325 in 2010 Class B Common Stock, shares issued: 60,632,042 in 2011 and 60,706,419 in 2010 Additional paid-in capital Retained earnings Treasury—Common Stock shares, at cost: 134,695,826 in 2011 and 132,871,512 in 2010 Accumulated other comprehensive loss The Hershey Company stockholders’ equity Noncontrolling interests in subsidiaries Total stockholders’ equity Total liabilities and stockholders’equity — — 299,269 299,195 60,632 60,706 490,817 4,699,597 434,865 4,374,718 (4,258,962) (4,052,101) (442,331) 849,022 23,626 872,648 $4,412,199 (215,067) 902,316 35,285 937,601 $4,272,732 THE HERSHEY COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS For the years ended December 31, 2011 In thousands of dollars Cash Flows Provided from (Used by) Operating Activities Net income $628,962 Adjustments to reconcile net income to net cash provided from operations: Depreciation and amortization 215,763 Stock-based compensation expense, net of tax of $15,127, 28,341 $17,413 and $19,223, respectively Excess tax benefits from stock-based compensation (13,997) Deferred income taxes 33,611 Gain on sale of trademark licensing rights, net of tax of (11,072) $5,962 Business realignment and impairment charges, net of tax of 30,838 $18,333, $20,635 and $38,308, respectively Contributions to pension plans (8,861) Changes in assets and liabilities, net of effects from business acquisitions and divestitures: Accounts receivable—trade (9,438) Inventories (115,331) Accounts payable 7,860 Other assets and liabilities (205,809) Net Cash Provided from Operating Activities 580,867 Cash Flows Provided from (Used by) Investing Activities Capital additions (323,961) Capitalized software additions (23,606) Proceeds from sales of property, plant and equipment 312 Proceeds from sales of trademark licensing rights 20,000 Business acquisitions (5,750) Net Cash (Used by) Investing Activities (333,005) Cash Flows Provided from (Used by) Financing Activities Net change in short-term borrowings 10,834 Long-term borrowings 249,126 Repayment of long-term debt (256,189) Proceeds from lease financing agreement 47,601 Cash dividends paid (304,083) Exercise of stock options 184,411 Excess tax benefits from stock-based compensation 13,997 Contributions from noncontrolling interests in subsidiaries — Repurchase of Common Stock (384,515) 2010 2009 $509,799 $435,994 197,116 182,411 32,055 34,927 (1,385) (18,654) (4,455) (40,578) — — 77,935 60,823 (6,073) 20,329 (13,910) 90,434 13,777 901,423 (54,457) 46,584 74,000 37,228 293,272 1,065,749 (179,538) (21,949) 2,201 — — (199,286) (126,324) (19,146) 10,364 — (15,220) (150,326) 1,156 348,208 (71,548) — (283,434) 92,033 1,385 10,199 (169,099) (458,047) — (8,252) — (263,403) 28,318 4,455 7,322 (9,314) Net Cash (Used by) Financing Activities (Decrease) Increase in Cash and Cash Equivalents Cash and Cash Equivalents as of January 1 Cash and Cash Equivalents as of December 31 Interest Paid Income Taxes Paid (438,818) (71,100) (190,956) 631,037 884,642 253,605 $693,686 $884,642 $97,892 $97,932 292,315 350,948 (698,921) 216,502 37,103 $253,605 $91,623 252,230 TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF Earnings, Comprehensive Earnings and Retained Earnings (in thousands except per share data) For the year ended December 31, 2011 2010 2009 Net product sales $528,369 $517,149 $495,592 Rental and royalty revenue 4,136 4,299 3,739 Total revenue 532,505 521,448 499,331 Product cost of goods sold 365,225 349,334 319,775 Rental and royalty cost 1,038 1,088 852 Total costs 366,263 350,422 320,627 Product gross margin 163,144 167,815 175,817 Rental and royalty gross margin 3,098 3,211 2,887 Total gross margin 166,242 171,026 178,704 Selling, marketing and administrative expenses 108,276 106,316 103,755 Impairment charges — — 14,000 Earnings from operations 57,966 64,710 60,949 Other income (expense), net 2,946 8,358 2,100 Earnings before income taxes 60,912 73,068 63,049 Provision for income taxes 16,974 20,005 9,892 Net earnings $43,938 $53,063 $53,157 Net earnings Other comprehensive earnings (loss) Comprehensive earnings Retained earnings at beginning of year. Net earnings Cash dividends Stock dividends Retained earnings at end of year Earnings per share $43,938 (8,740) $35,198 $135,866 43,938 (18,360) (47,175) $114,269 $0.76 $53,063 1,183 $54,246 $53,157 2,845 $56,002 $147,687 53,063 (18,078) (46,806) $135,866 $144,949 53,157 (17,790) (32,629) $147,687 $0.90 $0.89 Average Common and Class B Common shares outstanding 57,892 58,685 (The accompanying notes are an integral part of these statements.) 59,425 CONSOLIDATED STATEMENTS OF Financial Position TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES (in thousands except per share data) Assets December 31, 2011 2010 CURRENT ASSETS: Cash and cash equivalents $78,612 $115,976 Investments 10,895 7,996 Accounts receivable trade, less allowances of $1,731 and $1,531 41,895 37,394 Other receivables 3,391 9,961 Inventories: Finished goods and work-in-process Raw materials and supplies Prepaid expenses Deferred income taxes Total current assets PROPERTY, PLANT AND EQUIPMENT, at cost: Land Buildings Machinery and equipment Construction in progress Less—Accumulated depreciation Net property, plant and equipment OTHER ASSETS: Goodwill Trademarks Investments Split dollar officer life insurance Prepaid expenses Equity method investment Deferred income taxes Total other assets Total assets Liabilities and Shareholders’ Equity CURRENT LIABILITIES: Accounts payable Dividends payable Accrued liabilities Total current liabilities NONCURRENT LIABILITES: Deferred income taxes Postretirement health care and life insurance benefits Industrial development bonds Liability for uncertain tax positions Deferred compensation and other liabilities Total noncurrent liabilities SHAREHOLDERS’ EQUITY: Common stock, $.69-4/9 par value—120,000 shares authorized—36,479 and 36,057 respectively, issued Class B common stock, $.69-4/9 par value—40,000 shares authorized— 21,025 and 20,466 respectively, issued Capital in excess of par value Retained earnings, per accompanying statement Accumulated other comprehensive loss Treasury stock (at cost)—71 shares and 69 shares, respectively Total shareholders’ equity Total liabilities and shareholders’ equity 42,676 29,084 5,070 578 212,201 35,416 21,236 6,499 689 235,167 21,939 107,567 322,993 2,598 455,097 242,935 212,162 21,696 102,934 307,178 9,243 440,974 225,482 215,492 73,237 73,237 175,024 175,024 96,161 64,461 74,209 74,441 3,212 6,680 3,935 4,254 7,715 9,203 433,493 407,300 $857,856 $857,959 December 31, 2011 2010 $10,683 4,603 43,069 58,355 $9,791 4,529 44,185 58,505 43,521 26,108 7,500 8,345 48,092 133,566 47,865 20,689 7,500 9,835 46,157 132,046 25,333 25,040 14,601 14,212 533,677 114,269 (19,953) (1,992) 665,935 $857,856 505,495 135,866 (11,213) (1,992) 667,408 $857,959 TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF Cash Flows (in thousands) For the year ended December 31, 2011 2010 2009 CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings $43,938 $53,063 $53,157 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation Impairment charges Impairment of equity method investment Loss from equity method investment Amortization of marketable security premiums Changes in operating assets and liabilities: Accounts receivable Other receivables Inventories Prepaid expenses and other assets Accounts payable and accrued liabilities Income taxes payable and deferred Postretirement health care and life insurance benefits Deferred compensation and other liabilities Others Net cash provided by operating activities CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures Net purchase of trading securities Purchase of available for sale securities Sale and maturity of available for sale securities Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES: Shares repurchased and retired Dividends paid in cash Net cash used in financing activities Increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year Supplemental cash flow information Income taxes paid Interest paid Stock dividend issued (The accompanying notes are an integral part of 19,229 — — 194 1,267 18,279 — — 342 522 17,862 14,000 4,400 233 320 (5,448) 3,963 (15,631) 5,106 84 (5,772) 2,022 2,146 (708) 50,390 717 (2,373) (1,447) 4,936 2,180 2,322 1,429 2,525 310 82,805 (5,899) (2,088) 455 5,203 (2,755) (12,543) 1,384 2,960 305 76,994 (16,351) (3,234) (39,252) 7,680 (51,157) (12,813) (2,902) (9,301) 8,208 (16,808) (20,831) (1,713) (11,331) 17,511 (16,364) (18,190) (18,407) (36,597) (37,364) 115,976 $78,612 (22,881) (18,130) (41,011) 24,986 90,990 $115,976 (20,723) (17,825) (38,548) 22,082 68,908 $90,990 $16,906 $20,586 $38 $49 $47,053 $46,683 these statements.) $22,364 $182 $32,538 Based on the information contained in these financial statements, compute the following 2011 values for each company. (Round answers to 1 decimal place, e.g. 15.2.) Accounts receivable turnover. (For Tootsie Roll, use “Net product sales.” Assume all sales were credit sales.) (2) Average collection period for accounts receivable. (1) Tootsie Roll Hershey Company Accounts receivable turnover times times Average collection period days days
Purchase answer to see full attachment
User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.

Explanation & Answer


Anonymous
This is great! Exactly what I wanted.

Studypool
4.7
Trustpilot
4.5
Sitejabber
4.4

Similar Content

Related Tags