Student Name:
Class:
Independent Cases
Case A Case B
Gross sales revenue 259,000$ 165,000$
Sales returns and allowances 20,000 40,500
Net sales revenue 239,000 124,500
Cost of goods sold 167,300 87,150
Problem 06-03
McGraw-Hill/Irwin
Instructor
Income Statement Items
BERUGU EXPORT COMPANY
Independent Cases
Case A Case B
Gross sales revenue 259,000$ 165,000$
Sales returns and allowances 20,000 ?
Net sales revenue ? ?
Given Data P06-03:
Income Statement Items
BERUGU EXPORT COMPANY
Student Name:
Class:
Requirement 1:
Net sales revenue 135,100$
Cost of goods sold 78,400
Gross profit on sales 56,700
Correct!
Earnings per share on capital stock outstanding 1.79$
Correct!
Requirement 2:
Gross Profit Percentage 42.0%
Correct!
Meaning of gross profit percentage:
Receivables turnover 8.89
Instructor
For the Year Ended December 31, 2011
Income Statement
TUNGSTEN COMPANY, INC.
Problem 06-06
McGraw-Hill/Irwin
Net income 17,920$
Account Titles Debit Credit
Cash 33,600$
Accounts receivable (net) 14,400
Inventory, ending 52,000
Operational assets 40,000
Cost of goods sold 78,400
Selling expense 14,100
Administrative expense 15,400
Bad debt expense 1,600
For the Year Ended December 31, 2011
Trial Balance
TUNGSTEN COMPANY, INC.
Given Data P06-06:
Student Name: Instructor
Class: McGraw-Hill/Irwin
Problem 06-07
Requirement 1:
Company’s Books Bank Statement
Ending balance per Cash Ending balance per bank
account 23,900$ statement 23,570$
Additions: Additions:
Correct! Correct!
Requirement 2:
Account Debit Credit
Bank service charges deducted from bank stmt.
Customer’s check returned, insufficient funds.
Cash 1180
Interest revenue 1180 Correct!
Requirement 3:
Cash account balance on May 1, 2010:
Cash account 24,870$ Correct!
Requirement 4:
Current Assets:
Cash 24,870$ Correct!
Balance Sheet (April 30, 2010)
WOOD COMPANY
Bank Reconciliation, April 30, 2011
WOOD COMPANY
General Journal
WOOD COMPANY
Interest collected
Checks Deposits Balance
Balance, April 1, 2011 31,000$
Deposits during April 36,100$ 67,100
Interest collected 1,180 68,280
Checks cleared during April 44,500$ 23,780
April 30, 2011
Bank Statement
WOOD COMPANY
Given Data P06-07:
Student Name: Instructor
Class: McGraw-Hill/Irwin
Problem 06-08
Requirement 1:
Requirement 3:
Company‘s Books Bank Statement
Ending balance per Cash Ending balance per bank
account 20,370$ statement 18,190$
Interest collected 2,350 Deposits in transit 5,200
Bank service charge 120 Outstanding checks 790
Requirement 4:
Account Debit Credit
Cash 2,350
Interest revenue 2,350 Correct!
Bank service charge expense 120
Cash 120 Correct!
These entries are necessary because of the changes in the regular Cash account that
have not yet been recorded by the company. The bank already has recorded them in
brought up to date for financial statement purposes.
Service charges deducted from bank balance
Requirement 5:
Current Assets
Cash 22,600$
Correct!
Comparison of deposits listed in the Cash account with deposits listed on the bank
statement reveals a $5,200 deposit in transit on August 31.
Interest collected
Bank Reconciliation, August 31, 2011
ALLISON COMPANY
General Journal
ALLISON COMPANY
Requirement 2:
Date Checks Deposits Balance
Aug. 1 17,510$
2320$ 17,190
311,700$ 28,890
4430 28,460
5270 28,190
31 120 18,190
Ledger Account Entries for August:
Other Information:
Aug. 1 Balance 16,490
Deposits Aug. 2 250
Aug. 2 11,700 4880
12 4,000 15 280
ALLISON COMPANY
Given Data P06-08:
Cash Account
Checks written
August 31, 2011
Bank Statement
Required:
1.
This workbook is organized as follows:
Sheet Name Contents
CP6-3 (this worksheet) CP6-3 Problem Requirements and Workbook Layout
Industry Ratio Report Industry Ratio Report
AEO Balance Sheets American Eagle Outfitters, Inc. Consolidated Balance Sheets
CP6-3 Comparing Companies within an Industry
Compute gross profit percentage for both companies for the current and previous years. What do these changes
suggest?
these two companies doing better or worse than the industry average? Does this match your expectations from
requirement (2)?
Liquidity
Current Ratio 2.55
Company
Name
Ticker
Symbol
Quick Ratio 1.38 ANF
ARO
Activity AEO
Inventory
5.92 ANN
Payable
GES
Profitability JCG
Margin
Operating
Profit Margin
Net Profit
Margin
Return on
Equity
Return on
Assets
Quality of
Income
0.07 MW
Nordstrom, Inc.
Urban Outfitters Inc
The Men’s Warehouse Inc
The Buckle Inc
Ross Stores Inc
Pacific Sunwear of California Inc
Gross Profit
38.99% LTD
Leverage WTSLA
Times Interest
Earned
16.33
Interest
Coverage
16.39
Total
Debt/Total
1.08
Total
Assets/Total
1.92
Dividends
Payout
Dividend Yield 2.22%
Other
Sales
Sales Growth 2.39%
Capital
Acquisitions
1.93
Dividend
19.61%
Limited Brands Inc
Wet Seal Inc.
J. Crew Group Inc
Ann Taylor Stores
Guess? Inc
INDUSTRY RATIO REPORT
Retail Family Clothing Stores
COMPANIES USED IN INDUSTRY ANALYSIS
American Eagle Outfitters
Aeropostale Inc
Abercrombie & Fitch
Turnover
Days to Sell
Inventory
70.897 days BEBE
Receivables
Turnover
54.24 CHS
Average
Collection
15.07 days PSS
Fixed Asset
Turnover
5.76 DBRN
Total Asset
Turnover
1.90 FL
Accounts
6.43 GPS
bebe stores Inc
Gap Inc
Foot Locker, Inc
Dress Barn Inc.
Collective Brands Inc
Chico’s FAS 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
10,706 11,479
251,007 165,810
15,001 24,238
21,363 19,751
Accounts and note receivable
Property and equipment, at cost, net of accumulated depreciation and amortization
Total current assets
Deferred income taxes
Prepaid expenses and other
Long-term investments
Total assets
Other assets, net
Non-current deferred income taxes
$ 152,068 $ 157,928
$ 75,000 $ –
29,417 49,494
401,763 376,178
88,314 70,355
39,898 44,837
24,670 35,846
152,882 151,038
Total non-current liabilities
Other non-current liabilities
Non-current accrued income taxes
– –
Contributed capital
Total liabilities and stockholders’ equity
Total stockholders’ equity
Treasury stock, 43,248 and 43,596 shares, repectively, at cost
Retained earnings
Accumulated other comprehensive (loss) income
– –
2,485 2,481
Stockholders’ equity
Common stock, $0.01 par value; 600,000 shared authorized; 249,328 and 248,763 shares
Preferred stock, $0.01 par value; 5,000 shares authorized; none issued and outstanding
Non-current liabilities:
Total current liabilities
Accrued compensation and payroll taxes
Accounts payable
Current liabilities:
share issued; 205,281 and 204,480 shares outstanding , respectively
Commitments and contingencies
LIABILITIES AND STOCKHOLDERS’ EQUITY
Notes payable
Deferred lease credits
64,695 62,161
6,259 22,803
42,299 54,554
13,726 12,953
Accrued income and other taxes
Current portion of deferred lease credits
Unredeemed stored value cards and gift certificates
Accrued rent
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
Cost of sales, including certain buying, occupancy and
warehousi
ng
1,814,765 1,632,281 1,453,980
Gross profit 1,174,101 1,423,138 1,340,429
Selling, general and administrative expenses
740,742 715,180 665,606
Depreciation
131,219 109,203 88,033
For the Years Ended
AMERICAN EAGLE OUTFITTERS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Other
17,790 37,626 42,277
22,889 – –
Income
297,041 636,381 629,067
Provision for
117,980 236,362 241,708
Basic
Diluted
CP6-3
Home
January 1, February 2, February 3,
(In thousands) 2009 2008 2007
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
transfer of investment securities from available-for-sale classification
the sale of available-for-sale securities, net of tax
Reclassification adjustment for losses realized in net income due to
Reclassification adjustment for gain realized in net income realted to the
Unrealized (loss) gain on investments, net of tax
AMERICAN EAGLE OUTFITTERS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Years Ended
$ 179,061 $ 400,019 $ 387,359
related to ARS
Reclassification adjustment for OTTI charges realized in net income
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
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
(4) – (113) – – – – (113)
528 – 109 (2,348) 8,007 – – 5,768
– – – 387,359 – – – 387,359
– – – – – (314) (314)
– – – (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
Repurchase of common stock as part
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
Stock awards
(164) – – – (3,432) – – (3,432)
512 – – (4,710) 9,313 – – 4,603
– – – 179,061 – – – 179,061
– – – – – – (49,874) (49,874)
Cash dividends ($0.40 per share)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
Repurchase of common stock as part of publicly
Stock awards
Other comprehensive loss, net of tax
Net income
stock split
Adoption of FIN 48
Balance at February 3, 2007
Balance at February 4, 2007
AMERICAN EAGLE OUTFITTERS, INC.
Cash dividends ($0.28 per share)
Reissuance of treasury stock
Balance at January 31, 2006
(in thousands, except per share amounts)
Repurchase of common stock from employees
Reissuance of treasury stock
Other comprehensive loss, net of tax
Net income
(5,250) – – (146,485) – – (146,485)
announced programs
Cash paid for fractional shares in three-for-two
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
Prepaid expenses and other
(24,781) (1,334) (4,204)
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
18,887 4,640 7,791
(20,697) (31,416) 43,482
(19,188) (2,598) 33,047
123,132 64,251 361,909
302,193 464,270 749,268
(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)
Net cash provided by (used for) investing activities
78,389 102,661 (651,121)
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
– (438,291) (146,485)
(3,432) (12,310) (7,635)
– – (113)
3,799 13,183 28,447
693 6,156 19,541
(82,394) (80,796) (61,521)
(8,511) (513,970) (168,761)
(14,790) 3,363 (178)
357,281 56,324 (70,792)
116,061 59,737 130,529
Cash and cash equivalents – end of period
AMERICAN EAGLE OUTFITTERS, INC.
For the Years Ended
CONSOLIDATED STATEMENTS OF CASH FLOWS
20,296 33,670 36,556
24,469 (8,147) (27,572)
1,121 7,260 25,465
(693) (6,156) (19,541)
(1,141) 1,221 687
6,713 592 –
22,889 – –
– – 183,968
(13,735) (19,074) (53,527)
(10,094) (5,660) 7,448
2009 2008
$ 316,035 $ 49,912
5,919 4,694
Total current assets 624,402 385,183
Accounts payable
Accrued compensation
Accrued expenses and other current liabilities
Retained earnings
505,407 299,291
155,226 64,748
43,974 19,983
1,329,009$ 769,205$
none issued – –
167,712,088 and 166,104,615 issued and outstanding respectively 17 16
170,166 134,146
(in thousands, except share and per share data)
Consolidated Balance Sheets
URBAN OUTFITTERS, INC.
Current Assets:
Preferred shares; $.0001 par value, 10,000,000 shares authorized,
Cash and cash equivalents
January 31,
ASSETS
Common shares; $.0001 par value, 200,000,000 shares authorized,
Deferred taxes
Property and equipment, net
Marketable securities
Deferred income taxes and other assets
Total Assets
Additional paid-in capital
Accounts receivable, net of allowance for doubtful accounts of $1,229
Prepaid expenses and other current assets
Marketable securities
2009 2008 2007
Net sales 1,834,618$ 1,507,724$ 1,224,717$
Cost of sales, including certain buying, distribution
and occupancy costs 1,121,140 930,952 772,796
Gross profit 713,478 576,772 451,921
Selling, general and administrative expenses 414,043 351,827 287,932
Income from operations 299,435 224,945 163,989
Interest income 11,504 9,390 6,531
Consolidated Statements of Income
URBAN OUTFITTERS, INC.
Fiscal Year Ended January 31,
(in thousands, except share and per share data)
Other income 694 575 353
Other expenses (2,143) (515) (715)
Income before income tax expense 309,490 234,395 170,158
Income tax expense 110,126 74,164 53,952
Net income per common share:
Weighted average common shares outstanding:
Accumulated
Additional Other
Comprehensive Number of Par Paid-in Unearned Retained Comprehensive
Income Shares Value Capital Compensation Earnings Income (loss) Total
Balances as of February 1, 2006 164,831,477 16$ 138,050$ (3,905)$ 426,190$ 528$ 560,880$
Net Income 116,206$ – – – – 116,206 – 116,206
Foreign currency translation 3,614 – – – – – 3,614 3,614
Unrealized losses on marketable securities,
net of tax 142 – – – – – 142 142
Comprehensive income 119,962$
Share-based compensation – – 3,497 – – 3,497
Unearned compensation reclass – – (3,905) 3,905 – – –
Share-based compensation – – 3,277 – – – 3,277
Exercise of stock options 1,117,152 – 5,000 – – – 5,000
Tax effect of share exercises – – 7,341 – – – 7,341
Balances as of January 31, 2008 166,104,615 17 144,204 – 701,975 7,235 853,431
Net income 199,364 – – – – 199,364 – 199,364
Foreign currency translation (19,866) – – – – – (19,866) (19,866)
Unrealized losses on marketable securities,
net of tax (5,116) – – – – – (5,116) (5,116)
Comprehensive income 174,382$
Share-based compensation – – 3,637 – – – 3,637
Exercise of stock options 1,607,473 – 8,891 – – – 8,891
Tax effect of share exercises – – 13,434 – – – 13,434
Balances as of January 31, 2009 167,712,088 17$ 170,166$ –$ 901,339$ (17,747)$ 1,053,775$
Consolidated Statements of Shareholders’ Equity
URBAN OUTFITTERS, INC.
(in thousands, except share data)
Common Shares
Exercise of stock options 1,375,986 1 6,350 – – – 6,351
Tax effect of share exercises – 5,394 5,394
Share Repurchase (1,220,000) – (20,801) – – – (20,801)
Balances as of January 31, 2007 164,987,463 17 128,586 – 542,396 4,284 675,283
Net income 160,231 – – – – 160,231 – 160,231
Foreign currency translation 703 – – – – – 703 703
FIN48 adjustment – (652) (652)
Unrealized gains on marketable securities,
net of tax 2,248 – – – – – 2,248 2,248
Comprehensive income 163,182$
2009 2008 2007
Cash flows from operating activities:
Net income 199,364$ 160,231$ 116,206$
Accounts payable, accrued expenses and other liabilities (8,868) 75,967 33,600
Net cash provided by operating activities 251,570 254,353 187,117
Cash flows from investing activities:
Cash paid for property and equipment (112,553) (115,370) (212,029)
Cash paid for marketable securities (809,039) (293,633) (182,653)
Sales and maturities of marketable securities 864,685 220,101 193,274
Net cash used in investing activities (56,907) (188,902) (201,408)
Cash flows from financing activities:
Exercise of stock options 8,891 5,000 6,351
Excess tax benefit of stock options exercises 13,434 7,341 5,394
Share repurchases – – (20,801)
Net cash provided by (used in) financing activities 22,325 12,341 (9,056)
Effect of exchange rate changes on cash and cash equivalents (6,224) 212 702
Increase (decrease) in cash and cash equivalents 210,764 78,004 (22,645)
Cash and cash equivalents at beginning of period 105,271 27,267 49,912
Cash and cash equivalents at end of period 316,035$ 105,271$ 27,267$
Supplemental cash flow information:
Cash paid during the year for:
Income taxes 115,040$ 70,765$ 52,535$
Non-cash investing activities – Accrued capital expenditures 6,561$ 6,645$ 14,618$
(in thousands)
Consolidated Statements of Cash Flows
URBAN OUTFITTERS, INC.
Fiscal Year Ended January 31,
Adjustments to reconcile net income to net cash provided by operating activities: