Part 1
Preparing a Balance Sheet and Analyzing Some of Its Parts
Exquisite Jewelers is developing its annual financial statements for 2015. The following amounts were correct at December 31. 2015: cash. 558.000: accounts receivable. 571.000: merchandise inventory. 5154.000: prepaid insurance. 51.500: investment in stock of Z corporation (long-term). 536.000: store equipment. 567,000: used store equipment held for disposal. 59.000: accumulated depreciation. store equipment. 519.000: accounts payable. 552.500: long-term note payable. 542.000: income taxes pay¬able. 59.000: retained earnings. 5164.000: and common stock. 100.000 shares outstanding. par value 51.00 per share (originally sold and issued at 51.10 per share).
Required:
1. Based on these data. prepare a December 31.2015. balance sheet. Use the following major captions (list the individual items under these captions):
a. Assets: Current Assets. Long-Term Investments. Fixed Assets. and Other Assets.
b. Liabilities: Current Liabilities and Long-Term Liabilities.
c. Stockholders' Equity: Contributed Capital and Retained Earnings.
2. What is the net book value of the store equipment? Explain what this value means.
Part 2
Finding Financial Information
Refer to the financial statements of Urban Outfitters given in Appendix Cat the end of this book. At the bottom of each statement, the company warns readers that -The accompanying notes are an integral part of these financial statements." The following questions illustrate the types of information that you can find in the financial statements and accompanying notes. (Hint: Use the notes.)
Requirect
I. What subtotals does Urban Outfitters report on its income statement?
2. The company spent S190.010.000 on capital expenditures (property. plant. and equipment) and 5169.467,000 purchasing investments during the most recent year. Were operating activities or financing activiies the major source of cash for these expenditures?
3. What was the company's largest asset (net) at the end of the most recent year?
4. How does the company account for costs associated with developing its websites?
5. Over what useful lives are buildings depteciated?
6. What portion of gross -Property and Equipment" is composed of "Buildings"?
7. Compute the company's gross profit percentage for the most recent two years. Has it risen or fallen? Explain the meaning of the change.
Part 3
Preparing a Balance Sheet and Analyzing Some of Its Parts
Exquisite Jewelers is developing its annual financial statements for 2015. The following amounts were correct at December 31, 2015:
cash, $58,000; accounts receivable, $71,000; merchandise inventory, $154,000; prepaid insurance, $1,500;
investment in stock of Z corporation (long-term), $36,000; store equipment, $67,000; used store equipment held for disposal, $9,000;
accumulated depreciation, store equipment, $19,000; accounts payable, $52,500; long-term note payable, $42,000; income taxes payable, $9,000;
retained earnings, $164,000; and common stock, 100,000 shares outstanding, par value $1.00 per share (originally sold and issued at $1.10 per share).
Required:
1 Based on these data, prepare a December 31, 2015, balance sheet. (Amounts to be deducted should be indicated by a minus sign.)
Possible input areas are shaded.
| EXQUISITE JEWELERS |
| Balance Sheet |
| December 31, 2015 |
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| Total current assets |
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| Fixed assets: |
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| Other assets: |
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| Total assets |
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$ - |
| Liabilities |
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| Total current liabilities |
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$ - |
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| Total liabilities |
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$ - |
| Stockholders' Equity |
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| Total contributed capital |
$ - |
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| Total stockholders' equity |
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$ - |
| Total liabilities and stockholders' equity |
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$ - |
Required:
2 What is the net book value of the store equipment?
Part 4
Finding Financial Information
Refer to the financial statements of Urban Outfitters given in Appendix C at the end of this book. At the bottom of each statement, the company warns readers that "The accompanying notes are an integral part of these financial statements." The following questions illustrate the types of information that you can find in the financial statements and accompanying notes. (Hint: Use the notes.)
Required:
1. What subtotals does Urban Outfitters report on its income statement?
2. The company spent $190,010,000 on capital expenditures (property, plant, and equipment) and $169,467,000 purchasing investments
during the most recent year. Were operating activities or financing activities the major source of cash for these expenditures?
3. What was the company's largest asset (net) at the end of the most recent year?
4. How does the company account for costs associated with developing its websites?
5. Over what useful lives are buildings depreciated?
6. What portion of gross "Property and Equipment" is composed of "Buildings"?
7. Compute the company's gross profit percentage for the most recent two years. (Dollars in thousands.)
| Year Ended |
Gross Profit / |
Net Sales |
= Gross Profit % |
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8. Has it risen or fallen? Explain the meaning of the change.