Student Name:
Class:
Requirement 1:
(a) Correct!
(b) Correct!
Requirement 2:
Balance Sheet Income Statement
Stockholders’ Net
Transaction Assets Liabilities Equity
Revenues
Expenses Income
(a) NE (5,600) 5,600 5,600 NE 5,600
(b) NE 540 (540) NE 540 (540)
Problem 04-04
McGraw-Hill/Irwin
Instructor
ZIMMERMAN COMPANY
Deferred revenue
Accrued expense
Accrued expense
Accrued expense
Deferred expense
Deferred revenue
Deferred expense
Accrued revenue
2011 adjusting entries to be considered:
(a) Collected six months rent on storage space. 8,400$
(b) Principal (plus 12% interest) on note due 9/30/12.. 18,000$
ZIMMERMAN COMPANY
Student Name:
Class:
Requirement 1:
(a) Correct!
(b) Correct!
Requirement 2:
Balance Sheet Income Statement
Stockholders’ Net
Transaction Assets Liabilities Equity
Revenues
Expenses Income
(a) (4,000) NE (4,000) NE 4,000 (4,000)
(b) (1,150) NE (1,150) NE 1,150 (1,150)
Problem 04-05
McGraw-Hill/Irwin
Instructor
Deferred expense
BRAYDEN TOWING COMPANY
Deferred expense
Deferred expense
Accrued expense
Accrued expense
Accrued expense
Accrued expense
Accrued revenue
Transactions to be considered:
(a) Purchased new hauling van 24,600
Estimated depreciation for year 4,000
(b) Office supplies purchased for cash 1,000
Beginning office supplies inventory 400
BRAYDEN TOWING COMPANY
Student Name: Instructor
Class: McGraw-Hill/Irwin
Case 04-08
Cash
Basis Per
Crystal’s Corrected
Items Statement Explanation of Changes Basis
Revenues:
Spa fees 1,215,000$ (a), (b) Subtract prior year fees, add uncollected fees 1,102,000$
For the Year Ended December 31, 2012
Income Statement
CRYSTAL’S DAY SPA, INC.
Spa fees collected 1,215,000$
Expenses paid:
Rent for office space 130,000$
Supplies expense 31,900
Miscellaneous expenses 12,400
Total expenses 792,100
Profit for the year 422,900$
Additional data:
a. Spa fees collected for services performed
prior to 2012 (total collected $1,215,000) 142,000$
b. Uncollected spa fees 29,000$
2012
Statement of Profits
CRYSTAL’S DAY SPA, INC.
Required:
1. What was advertising expense for each company for the most recent year? Where did you find the information?
2.
This workbook is organized as follows:
Sheet Name Contents
CP4-3 (this worksheet) CP4-3 Problem Requirements and Workbook Layout
Industry Ratio Report Industry Ratio Report
AEO Balance Sheets American Eagle Outfitters, Inc. Consolidated Balance Sheets
AEO Income Statements American Eagle Outfitters, Inc. Consolidated Statements of Operations
AEO Stmts of Stockholders’ Eq American Eagle Outfitters, Inc. Consolidated Statements of Stockholders’ Equity
CP4-3 Comparing Companies within an Industry
Compute the percentage of Advertising Expense to Net Sales for the most recent year for both companies. Which
company incurred the higher percentage? Show computations. Are you able to perform the same comparison for the
previous two years? If so, show the computations. If not, explain why not.
4.
Liquidity
Current Ratio 2.55
Company
Ticker
Quick Ratio 1.38 ANF
ARO
Activity AEO
Inventory
5.92 ANN
GES
Profitability JCG
Gross Profit
38.99% LTD
Operating
6.24% JWN
Net Profit
3.77% PSUN
Return on
13.11% ROST
Return on
7.17% BKE
Quality of
0.07 MW
The Men’s Warehouse Inc
The Buckle Inc
Ross Stores Inc
Pacific Sunwear of California Inc
0.72 URBN
Leverage WTSLA
Times Interest
16.33
Interest
16.39
Total
1.08
Total
1.92
Dividends
Dividend
19.61%
Dividend Yield 2.22%
Other
2.39%
Sales Growth 2.39%
Abercrombie & Fitch
J. Crew Group Inc
Ann Taylor Stores
Guess? Inc
COMPANIES USED IN INDUSTRY ANALYSIS
American Eagle Outfitters
Aeropostale Inc
INDUSTRY RATIO REPORT
Retail Family Clothing Stores
Wet Seal Inc.
Urban Outfitters Inc
Nordstrom, Inc.
Limited Brands Inc
Days to Sell
70.897 days BEBE
Receivables
54.24 CHS
Average
15.07 days PSS
Fixed Asset
5.76 DBRN
Total Asset
1.90 FL
Accounts
6.43 GPS
Collective Brands Inc
Chico’s FAS Inc
bebe stores Inc
Gap Inc
Foot Locker, Inc
Dress Barn Inc.
January 31, February 2,
(in thousands, except per share amounts) 2009 2008
$ 473,342 $ 116,061
10,511 503,878
294,928 286,485
AMERICAN EAGLE OUTFITTERS, INC.
CONSOLIDATED BALANCE SHEETS
Merchandise inventory
ASSETS
Short-term investments
Cash and cash equivalents
Current assets:
41,471 31,920
59,660 35,486
45,447 47,004
925,359 1,020,834
740,240 625,568
251,007 165,810
15,001 24,238
21,363 19,751
Non-current deferred income taxes
Other assets, net
Total assets
Property and equipment, at cost, net of accumulated depreciation and amortization
Total current assets
Long-term investments
Deferred income taxes
Prepaid expenses and other
Accounts and note receivable
$ 152,068 $ 157,928
$ 75,000 $ –
88,314 70,355
39,898 44,837
24,670 35,846
152,882 151,038
– –
Preferred stock, $0.01 par value; 5,000 shares authorized; none issued and outstanding
LIABILITIES AND STOCKHOLDERS’ EQUITY
Notes payable
Non-current accrued income taxes
Deferred lease credits
Commitments and contingencies
Accounts payable
Current liabilities:
Total non-current liabilities
Other non-current liabilities
Non-current liabilities:
29,417 49,494
64,695 62,161
6,259 22,803
42,299 54,554
13,726 12,953
18,299 16,285
401,763 376,178
Current portion of deferred lease credits
Unredeemed stored value cards and gift certificates
Accrued rent
Other liabilities and accrued expenses
Accrued income and other taxes
Accrued compensation and payroll taxes
Total current liabilities
January 1, February 2, February 3,
(In thousands, except per share amounts) 2009 2008 2007
Net sales $ 2,988,866 $ 3,055,419 $ 2,794,409
Depreciation
131,219 109,203 88,033
Operating
302,140 598,755 586,790
Other
17,790 37,626 42,277
Other-than-
22,889 – –
Income
297,041 636,381 629,067
Provision for
117,980 236,362 241,708
Basic
$ 0.87 $ 1.85 $ 1.74
Diluted
$ 0.86 $ 1.82 $ 1.70
Weighted average common shares outstanding – basic
205,169 216,119 222,662
Weighted average common shares outstanding – diluted
207,582 220,280 228,384
For the Years Ended
AMERICAN EAGLE OUTFITTERS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Gross profit 1,174,101 1,423,138 1,340,429
740,742 715,180 665,606
CP4-3
Home
January 1, February 2, February 3,
(In thousands) 2009 2008 2007
$ 179,061 $ 400,019 $ 387,359
197 242 356
(378) 947 (191)
– – (177)
– – 878
(49,874) 13,771 (314)
Comprehensive income
Other comprehensive (loss) income
Reclassification adjustment for foreign currenty loss reasinzed in net
income realted to the disposition of National Logistics Services
to trading classification, net of tax
the sale of available-for-sale securities, net of tax
Reclassification adjustment for losses realized in net income due to
AMERICAN EAGLE OUTFITTERS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Years Ended
Net income
transfer of investment securities from available-for-sale classification
Reclassification adjustment for gain realized in net income realted to the
Unrealized (loss) gain on investments, net of tax
related to ARS
Reclassification adjustment for OTTI charges realized in net income
Other comprehensive (loss) income:
Accumulated
Shares Deferred Other
Outstanding Common Contributed Retained Treasury Compensation Comprehensive Stockholders’
(1) Stock Capital Earnings Stock (2) Expense Income (loss) Equity
– – – (61,521) – – – (61,521)
221,284 2,461 453,418 1,302,345 (362,626) – 21,714 1,417,312
– – – (13,304) – (13,304)
221,284 2,461 453,418 1,289,041 (362,626) – 21,714 1,404,008
1,092 20 39,977 – – – – 39,997
(18,750) – – – (438,291) – – (438,291)
(415) – – – (12,310) – – (12,310)
1,269 – – (6,480) 20,546 – – 14,066
204,480 2,481 493,395 1,601,784 (792,681) – 35,485 1,340,464
453 4 20,179 420 – – – 20,603
(164) – – – (3,432) – – (3,432)
Repurchase of common stock from employees
Stock awards
Net income
Repurchase of common stock from employees
of publicly announced programs
Balance at February 2, 2008
Cash dividends ($0.98 per share)
Other comprehensive income, net of tax
Repurchase of common stock as part
Stock awards
512 – – (4,710) 9,313 – – 4,603
– – – 179,061 – – – 179,061
– – – – – – (49,874) (49,874)
– – – (82,394) – – – (82,394)
$ 205,281 $ 2,485 $ 513,574 $ 1,694,161 $ (786,800) $ – $ (14,389) $ 1,409,031
Reissuance of treasury stock
Balance at January 31, 2009
Cash dividends ($0.40 per share)
Other comprehensive loss, net of tax
Net income
Adoption of FIN 48
Balance at February 3, 2007
Balance at February 4, 2007
AMERICAN EAGLE OUTFITTERS, INC.
Cash dividends ($0.28 per share)
(in thousands, except per share amounts)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
221,897 $ 2,416 $ 369,807 $ 978,855 $ (216,513) $ (1,041) $ 22,028 $ 1,155,552
4,556 45 83,615 – – 1,041 – 84,701
(5,250) – – (146,485) – – (146,485)
(4) – (113) – – – – (113)
528 – 109 (2,348) 8,007 – – 5,768
announced programs
Repurchase of common stock as part of publicly
Stock awards
Other comprehensive loss, net of tax
Net income
stock split
Cash paid for fractional shares in three-for-two
Reissuance of treasury stock
Balance at January 31, 2006
January 31, February 2, February 3,
(In thousands) 2009 2008 2007
Operating activities:
Net income
$ 179,061 $ 400,019 $ 387,359
Adjustments to reconcile income to net cash provided by operating activities:
Depreciation and amortization
133,141 110,753 89,698
Stock-based compensation
20,296 33,670 36,556
Provision for deferred income taxes
24,469 (8,147) (27,572)
Other assets, net
390 (3,242) (5,357)
Accounts payable
(3,053) (15,559) 32,345
Unredeemed gift cards and gift certificates
(11,392) (699) 11,623
Deferred lease credits
18,887 4,640 7,791
Accrued income and other taxes
(20,697) (31,416) 43,482
(19,188) (2,598) 33,047
123,132 64,251 361,909
(265,335) (250,407) (225,939)
– – 12,345
(48,655) (1,772,653) (1,353,339)
393,559 2,126,891 915,952
(1,180) (1,170) (140)
Financing activities:
Payments on note payable and capital leases
(2,177) (1,912) (3,020)
Proceeds from issuance of note payable
75,000 – 2,025
Repurchase of common stock as part of publicly announced programs
– (438,291) (146,485)
Repurchase of common stock from employees
(3,432) (12,310) (7,635)
– – (113)
3,799 13,183 28,447
693 6,156 19,541
(82,394) (80,796) (61,521)
(14,790) 3,363 (178)
116,061 59,737 130,529
AMERICAN EAGLE OUTFITTERS, INC.
For the Years Ended
CONSOLIDATED STATEMENTS OF CASH FLOWS
1,121 7,260 25,465
(693) (6,156) (19,541)
(1,141) 1,221 687
6,713 592 –
22,889 – –
(13,735) (19,074) (53,527)
(10,094) (5,660) 7,448
(24,781) (1,334) (4,204)