Sample Financial Management Problems

FINANCIAL MANAGEMENT SAMPLE CASES (FINANCIAL STATEMENTS PREPARATION) Case 1—Income statement relationships.

Fill in the appropriate blanks for each of the independent situations below. Company Compan y A Company Compan y B Company Compan y C Sales revenue (a !""""""" !#$#%$&& !'$&%&&& Beinnin inventory ')%*&& (d """"""" +&%&&& ,et purchases -'%#&& )''%*&& ( """""""   /ndin inventory ')%)&& -&0%&&& *#%&&& Cost of oods sold (b """"""" (e """"""" $-%&&& 1ross profit '%#&& -&0%&&& (h """""""   2peratin e3penses (c "" """"""" '&%&&& $0%&&& Income before ta3es *%&&& (f """"""" (i """""""  

Case 2—4ultiple5step income statement.

6resented below is information related to Farr Company. 7etained earnins% 8ecember #-% )&-) ! *'&%&&& Sales revenue -%$&&%&&& Sellin and administrative e3penses )$&%&&& 9urricane loss (pre5ta3 on plant (e3traordinary item )&%&&& Cash dividends declared on common stock ##%*&& Cost of oods sold 0#&%&&& 1ain resultin resultin from computatio computation n error on depreciation depreciation chare in )&-)&-- (pre5ta3 ')&%&&& ')&%&&& 2ther revenue -)&%&&& 2ther e3penses -&&%&&& Instructions

6repare in ood form a multiple5step income statement for the year )&-#. Assume a #&: ta3 rate and that 0&%&&& shares of common stock were outstandin durin the year. Case 3—4ultiple5step income statement.

Shown below is an income statement for )&-) that was prepared by a poorly trained bookkeeper of 9owell Corporation. 9owell Corporation I,C24/ S;A;/4/,; 8ecember #-% )&-) Sales revenue Investment revenue Cost of merchandise sold Sellin e3penses  Administrative e3penses Interest e3pense Income before special items Special items raus Company as of  8ecember #-% )&-). >raus Company Balance Sheet as of 8ecember #-% )&-) Cash  Accounts receivable (net Inventory Investments /@uipment (net 6atents

! 0'%&&& ')%)&& '%&&& *%#&& -&*%&&& #)%&&& !$&0%'&&

Accounts payable