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Kate is very pleased with the results of the first year of year on a high note, with the company's reputation for producing quality cards leading to more bsi. ness than she can currently manage. Kate is considering expanding and bringing in several emlay- ees. In order to do this, she will need to find a larger location and also purchase more this means additional financing. Kate has asked you to look at her year-end financial statements as if you were a banker considering giving Kate a loan. Comment on your findings and provide calcula- tions to support your comments. equipment. All

Kate is very pleased with the results of the first year of year on a high note, with the company's reputation for producing quality cards leading to more bsi. ness than she can currently manage. Kate is considering expanding and bringing in several emlay- ees. In order to do this, she will need to find a larger location and also purchase more this means additional financing. Kate has asked you to look at her year-end financial statements as if you were a banker considering giving Kate a loan. Comment on your findings and provide calcula- tions to support your comments. equipment. All

Essentials of Business Analytics (MindTap Course List)
Essentials of Business Analytics (MindTap Course List)
2nd Edition
ISBN:9781305627734
Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Chapter6: Statistical Inference
Section: Chapter Questions
Problem 29P: Carpetland salespersons average 8,000 per week in sales. Steve Contois, the firms vice president,...
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the nearest percent. Which company has the most seasonal business? Briefly explain. Which company is Toys "R" Us? The Gillette Company? Briefly explain. c. d. SERIAL PROBLEM:KATE'S CARDS Kate is very pleased with the results of the first year of operations for Kate's Cards. She ended the year on a high note, with the company's reputation for producing quality cards leading to more basi- ness than she can currently manage. Kate is considering expanding and bringing in several employ- ees. In order to do this, she will need to find a larger location and also purchase more equipment. All this means additional financing. Kate has asked you to look at her year-end financial statements as if you were a banker considering giving Kate a loan. Comment on your findings and provide calcula- tions to support your comments. (Note: This is a continuation of the Serial Problem: Kate's Cards from Chapter 1 through Chapter 12.) SP13. KATE'S CARDS Income Statement Year Ended August 31, 2019 $185,000 106,000 Sales revenue. Cost of goods sold 79,000 Gross profit.. Operating expenses Wages Consulting. 18,000 11,850 1,200 2,400 14,400 3,250 Insurance Utilities .. Rent.... Depreciation. Total operating expenses 51,100 Income from operations Interest expense. 27,900 900 Income before income tax 27,000 5,400 Income tax expense Net income.... $ 21,600
Transcribed Image Text:the nearest percent. Which company has the most seasonal business? Briefly explain. Which company is Toys "R" Us? The Gillette Company? Briefly explain. c. d. SERIAL PROBLEM:KATE'S CARDS Kate is very pleased with the results of the first year of operations for Kate's Cards. She ended the year on a high note, with the company's reputation for producing quality cards leading to more basi- ness than she can currently manage. Kate is considering expanding and bringing in several employ- ees. In order to do this, she will need to find a larger location and also purchase more equipment. All this means additional financing. Kate has asked you to look at her year-end financial statements as if you were a banker considering giving Kate a loan. Comment on your findings and provide calcula- tions to support your comments. (Note: This is a continuation of the Serial Problem: Kate's Cards from Chapter 1 through Chapter 12.) SP13. KATE'S CARDS Income Statement Year Ended August 31, 2019 $185,000 106,000 Sales revenue. Cost of goods sold 79,000 Gross profit.. Operating expenses Wages Consulting. 18,000 11,850 1,200 2,400 14,400 3,250 Insurance Utilities .. Rent.... Depreciation. Total operating expenses 51,100 Income from operations Interest expense. 27,900 900 Income before income tax 27,000 5,400 Income tax expense Net income.... $ 21,600
Chapter 13 Analysis and Interpretation of Financial Statemonts 679 pss Publishera KATE'S CARDS Balance Sheet August 31, 2019 Assets Current assets Cash. Accounts receivable Inventory........ Prepaid insurance. Year ..... $17,400 11,000 $5,410.8 3,366.5 16.000 1,000 7,169.2 2,200.6 Total current assets Equipment Accumulated depreciation 45,400 17,500 3,250 Total assets $59,650 Liabilities Current liabilities Accounts payable. Unearned revenue Other current liabilities pund to $ 6,200 und to 1,250 1,900 Total current liabilities Note payable 9,350 15,000 Total liabilities. 24,350 Stockholders' equity Common stock 500 Additional paid-in-capital Preferred stock. Retained earnings 9,500 5,000 20,300 che si- y- 11 Total ștockholders' equity. 35,300 $59,650 Total liabilities and stockholders' equity KATE'S CARDS Statement of Cash Flows Year Ended August 31, 2019 Cash flow from operating activities Net income.. . Add depreciation Increase in accounts receivable Increase in inventory. Increase in prepaid expenses. Increase in accounts payable Increase in unearned revenue Increase in other current liabilities $21,600 3,250 (11,000) (16,000) (1,000) 6,200 1,250 1,900 6,200 Cash provided by operating activities. Cash flow from investing activities Purchase of equipment. (17,500) (17,500) Cash used by investing activities Cash flow from financing activities Proceeds from bank note Issuance of common stock. Issuance of preferred stock. Cash dividends 15,000 10,000 5,000 (1,300)* ...... 28,700 Cash provided by financing activities 17,400 Net increase in cash. Cash at beginning of year. Cash at end of year $17,400 *Kate issued cash dividends on both the common stock and the preferred stock. There are 50 preferred shares outstanding and 500 common shares outstanding. The dividends that Kate paid were $6 per share on the preferred • 300 shares and $2 per share on the common shares.
Transcribed Image Text:Chapter 13 Analysis and Interpretation of Financial Statemonts 679 pss Publishera KATE'S CARDS Balance Sheet August 31, 2019 Assets Current assets Cash. Accounts receivable Inventory........ Prepaid insurance. Year ..... $17,400 11,000 $5,410.8 3,366.5 16.000 1,000 7,169.2 2,200.6 Total current assets Equipment Accumulated depreciation 45,400 17,500 3,250 Total assets $59,650 Liabilities Current liabilities Accounts payable. Unearned revenue Other current liabilities pund to $ 6,200 und to 1,250 1,900 Total current liabilities Note payable 9,350 15,000 Total liabilities. 24,350 Stockholders' equity Common stock 500 Additional paid-in-capital Preferred stock. Retained earnings 9,500 5,000 20,300 che si- y- 11 Total ștockholders' equity. 35,300 $59,650 Total liabilities and stockholders' equity KATE'S CARDS Statement of Cash Flows Year Ended August 31, 2019 Cash flow from operating activities Net income.. . Add depreciation Increase in accounts receivable Increase in inventory. Increase in prepaid expenses. Increase in accounts payable Increase in unearned revenue Increase in other current liabilities $21,600 3,250 (11,000) (16,000) (1,000) 6,200 1,250 1,900 6,200 Cash provided by operating activities. Cash flow from investing activities Purchase of equipment. (17,500) (17,500) Cash used by investing activities Cash flow from financing activities Proceeds from bank note Issuance of common stock. Issuance of preferred stock. Cash dividends 15,000 10,000 5,000 (1,300)* ...... 28,700 Cash provided by financing activities 17,400 Net increase in cash. Cash at beginning of year. Cash at end of year $17,400 *Kate issued cash dividends on both the common stock and the preferred stock. There are 50 preferred shares outstanding and 500 common shares outstanding. The dividends that Kate paid were $6 per share on the preferred • 300 shares and $2 per share on the common shares.
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