Question
A fire destroyed your firm’s ending balance sheet and income statement after the year-end
but before the financial statements are released. However, you have been successful in obtaining the
numbers for the beginning balance sheet and the statement of cash flows, which are provided to you and
your team members in Excel format. Fields representing the missing balance sheet and income statement
are End of year2 in the Excel sheet
CONSOLIDATED BALANCE SHEETS (USD $) End of year 2 End of year 1 In Thousands, unless otherwise specified Current assets: Cash and cash equivalents 598 Receivables, net 230 Inventories, net 2309 Other current assets 47 Total current assets 3184 Property and equipment, net of accumulated depreciation 1292 Assets held for sale 1 Goodwill 76 Intangible assets, net 29 Other assets, net 32 Assets, Total 4614 Current liabilities: 0 Current portion of long-term debt 0 Accounts payable 2030 Accrued expenses 380 Other current liabilities 150 Total current liabilities 2560 Long-term debt 604 Other long-term liabilities 239 Commitments and Contingencies 0 Stockholders Equity Attributable to Parent [Abstract] 0 Preferred stock, nonvoting, $00001 par value 0 Common stock, voting, $00001 par value 0 Additional paid-in capital 520 Treasury stock, at cost -27 Accumulated other comprehensive income (loss) 3 Retained earnings 715 Total stockholders equity 1210 Liabilities and Stockholders Equity, Total 4613 CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) 12 Months Ended In Thousands, except Per Share data, unless otherwise specified Year 2 Net sales Cost of sales, including purchasing and warehousing costs Gross profit Selling, general and administrative expenses Operating income Interest expense Other income, net Total other, net Income before provision for income taxes Provision for income taxes Net income CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) 12 Months Ended In Thousands, unless otherwise specified Year 2 Cash flows from operating activities: Net income $392 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 208 Share-based compensation 13 Loss on property and equipment, net 1 Other 2 Provision for deferred income taxes -2 Excess tax benefit from share-based compensation -16 Increase Decrease in Operating Capital Receivables, net -32 Inventories, net -204 Other assets 11 Accounts payable 113 Accrued expenses 63 Other liabilities -4 Net cash provided by operating activities 545 Cash flows from investing activities: Purchases of property and equipment -196 Payments to Acquire Businesses, Gross -186 Sale of certain assets of acquired business 19 Proceeds from sales of property and equipment 1 Net cash used in investing activities -362 Cash flows from financing activities: (Decrease) increase in bank overdrafts -3 Decrease in financed vendor accounts payable 0 Issuance of senior unsecured notes 449 Payment of debt related costs -9 Borrowings under credit facilities 0 Payments on credit facilities 0 Dividends paid -18 Proceeds from the issuance of common stock, primarily exercise of stock options 4 Tax withholdings related to the exercise of stock appreciation rights -22 Excess tax benefit from share-based compensation 16 Repurchase of common stock -81 Contingent payment accrued on acquisitions 5 Other -1 Net cash provided by (used in) financing activities 331 Net increase (decrease) in cash and cash equivalents 514 Cash and cash equivalents, beginning of period 598 Cash and cash equivalents, end of period 1,112 Supplemental cash flow information: Interest paid 35 Income tax payments 219 Non-cash transactions: Accrued purchases of property and equipment 21 Retirement of common stock 0 Contingent consideration accrued on acquisitions 0 Changes in other comprehensive income 1 Declared but unpaid cash dividends $4
Explanation / Answer
Assumptions taken :
1. The new business acquired considered as part otther assets.
2. The Interest paid is assumed to be opening as payable in the beginning of the year.
3. The asset sold is the one which is held for sale in the beginning of the year.
4. The payment of bank overdraft adjustment is made in the closing balance of cash and cash equilvalents.
CONSOLIDATED BALANCE SHEETS (USD $) End of year 2 End of year 1 Current assets: Cash and cash equivalents 1112 598 Receivables, net 262 230 Inventories, net 2513 2309 Other current assets 36 47 Total current assets 3923 3184 Property and equipment, net of accumulated depreciation 1279 1292 Assets held for sale 0 1 Goodwill 76 76 Intangible assets, net 29 29 Other assets, net ( Business Acq.) 199 32
Assets, Total 5506 4614 Current liabilities: Current portion of long-term debt 0 0 Accounts payable 2143 2030 Accrued expenses 448 380 Other current liabilities 146 150 Total current liabilities 2737 2560 Long-term debt 1053 604 Other long-term liabilities 214 239 Commitments and Contingencies 0 0 Stockholders Equity Attributable to Parent [Abstract] 0 0 Preferred stock, nonvoting, $00001 par value 0 0 Common stock, voting, $00001 par value 0 0 Additional paid-in capital 443 520 Treasury stock, at cost -33 -27 Accumulated other comprehensive income (loss) 3 3 Retained earnings 1089 715 Total stockholders equity 1502 1211
Liabilities and Stockholders Equity, Total 5506 4614 Assumptions taken :
1. The new business acquired considered as part otther assets.
2. The Interest paid is assumed to be opening as payable in the beginning of the year.
3. The asset sold is the one which is held for sale in the beginning of the year.
4. The payment of bank overdraft adjustment is made in the closing balance of cash and cash equilvalents.
