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Cornerstones of Financial Accounting

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter9: Long-term Liabilities

Section: Chapter Questions

Problem 103.1C: Leverage Cook Corporation issued financial statements at December 31, 2019, that include the...

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How can the owners use the cash flow information or what can the statement of cash flows helps the owners to do?

Maple Group Ltd
Comparative Balance Sheet
December 31, 2020 and 2019
2020
2019 Increase/(Decrease)
Assets
Cash and cash equivalent
?
15,300
?
Accounts Receivable
2,250
Inventories
102,000
142,300
109,700
94,300
262,500
?
Fixed Assets, net
Total Assets
299,050
36,550
Liabilities
Accounts payable
25,600
24,000
54,350
26,600
22,800
Accrued liabilities
?
Long-term notes payable
Stockholders' Equity:
8,900
35,100
36,550
Common Stock
140,300
54,800
299,050
Retained earnings
19,700
Total liabilities and stockholders' equity
262,500

Maple Group Ltd
Income Statement
Year Ended December 31,2020
Revenues and gains:
Sales revenue
439,000
Interest revenue
11,800
Total revenues and gains
Expenses
Cost of goods sold
Depreciation expense
Other operating expense
Interest expense
450,800
205,500
15,500
126,000
24,300
Total expenses
371,300
79,500
16,300
Income before income taxes
Income tax expense
Net Income
63,200
Notes
Acquisition of fixed asset during 2020
Sale proceed from sale of plant asset
Receipt for issuance of notes payable
Payment for note payable
Dividend paid
Book value of equipment sold
63,500
7,650
28,100

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Leverage Cook Corporation issued financial statements at December 31, 2019, that include the following information: Balance sheet at December 31,2019 Assets $8,000,000 Liabilities $1,200,000 Stockholders' equity (300,000 shares) $6,800,000 Income statement for 2019: Income from operations $1,200,000 Less: Interest expense (100,000) Income before taxes $1,100,000 Less: Income taxes expense (0,30) (330,000) Net income $ 770,000 The levels of assets, liabilities, stockholders' equity, and operating income have been stable in recent years; however, Cook Corporation is planning a 51,800,000 expansion program that will increase income from operations by $350,000 to $1,550,000, Cook is planning to sell 8.5% notes at par to finance the expansion. Required: What earnings per share does Cook report before the expansion?
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