Exercise 8-4 The ledger of Wainwright Company at the end of the current year shows Accounts Receivable $76,000; Credit Sales $986,000; and Sales Returns and Allowances $42,200. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) (a) If Wainwright uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Wainwright determines that Hiller’s $1,000 balance is uncollectible. (b) If Allowance for Doubtful Accounts has a credit balance of $1,200 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 11% of accounts receivable. (c) If Allowance for Doubtful Accounts has a debit balance of $950 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 8% of accounts receivable. No. Account Titles and Explanation Debit Credit (a) (b) (c) Exercise 8-11 Suppose the following information was taken from the 2014 financial statements of FedEx Corporation, a major global transportation/delivery company. (in millions) 2014 2013 Accounts receivable (gross) $ 3,678 $ 4,608 Accounts receivable (net) 3,374 4,330 Allowance for doubtful accounts 304 278 Sales revenue 34,275 37,054 Total current assets 7,104 7,206 Answer each of the following questions. Calculate the accounts receivable turnover and the average collection period for 2014 for FedEx. (Round answers to 1 decimal place, e.g. 12.5. Use 365 days for calculation.) Accounts receivable turnover times The average collection period for 2014 days Broadening Your Perspective 8-1 The financial statements of Tootsie Roll are presented below. TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF Earnings, Comprehensive Earnings and Retained Earnings (in thousands except per share data) For the year ended December 31, 2011 2010 2009 Net product sales $528,369 $517,149 $495,592 Rental and royalty revenue 4,136 4,299 3,739 Total revenue 532,505 521,448 499,331 Product cost of goods sold 365,225 349,334 319,775 Rental and royalty cost 1,038 1,088 852 Total costs 366,263 350,422 320,627 Product gross margin 163,144 167,815 175,817 Rental and royalty gross margin 3,098 3,211 2,887 Total gross margin 166,242 171,026 178,704 Selling, marketing and administrative expenses 108,276 106,316 103,755 Impairment charges — — 14,000 Earnings from operations 57,966 64,710 60,949 Other income (expense), net 2,946 8,358 2,100 Earnings before income taxes 60,912 73,068 63,049 Provision for income taxes 16,974 20,005 9,892 Net earnings $43,938 $53,063 $53,157 Net earnings $43,938 $53,063 $53,157 Other comprehensive earnings (loss) (8,740 ) 1,183 2,845 Comprehensive earnings ...

1. Exercise 8-4
The ledger of Wainwright Company at the end of the current
year shows Accounts Receivable $76,000; Credit Sales
$986,000; and Sales Returns and Allowances $42,200. (Credit
account titles are automatically indented when amount is
entered. Do not indent manually.)
(a)
If Wainwright uses the direct write-off method to account for
uncollectible accounts, journalize the adjusting entry at
December 31, assuming Wainwright determines that Hiller’s
$1,000 balance is uncollectible.
(b)
If Allowance for Doubtful Accounts has a credit balance of
$1,200 in the trial balance, journalize the adjusting entry at
December 31, assuming bad debts are expected to be 11% of
accounts receivable.
(c)
If Allowance for Doubtful Accounts has a debit balance of
$950 in the trial balance, journalize the adjusting entry at
December 31, assuming bad debts are expected to be 8% of
accounts receivable.
No.
Account Titles and Explanation
Debit
Credit
(a)

2. (b)
(c)
Exercise 8-11
Suppose the following information was taken from the 2014
financial statements of FedEx Corporation, a major global
transportation/delivery company.
(in millions)
2014
2013
Accounts receivable (gross)

3. $ 3,678
$ 4,608
Accounts receivable (net)
3,374
4,330
Allowance for doubtful accounts
304
278
Sales revenue
34,275
37,054
Total current assets
7,104
7,206
Answer each of the following questions.
Calculate the accounts receivable turnover and the average

4. collection period for 2014 for FedEx. (Round answers to 1
decimal place, e.g. 12.5. Use 365 days for calculation.)
Accounts receivable turnover
times
The average collection period for 2014
days
Broadening Your Perspective 8-1
The financial statements of Tootsie Roll are presented below.
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
Earnings, Comprehensive Earnings and Retained Earnings (in
thousands except per share data)
For the year ended December 31,
2011
2010

5. 2009
Net product sales
$528,369
$517,149
$495,592
Rental and royalty revenue
4,136
4,299
3,739
Total revenue
532,505
521,448
499,331

6. Product cost of goods sold
365,225
349,334
319,775
Rental and royalty cost
1,038
1,088
852
Total costs
366,263
350,422
320,627

7. Product gross margin
163,144
167,815
175,817
Rental and royalty gross margin
3,098
3,211
2,887
Total gross margin
166,242
171,026
178,704

8. Selling, marketing and administrative expenses
108,276
106,316
103,755
Impairment charges
—
—
14,000
Earnings from operations
57,966
64,710
60,949

9. Other income (expense), net
2,946
8,358
2,100
Earnings before income taxes
60,912
73,068
63,049
Provision for income taxes
16,974
20,005
9,892

10. Net earnings
$43,938
$53,063
$53,157
Net earnings
$43,938
$53,063
$53,157

11. Other comprehensive earnings (loss)
(8,740
)
1,183
2,845
Comprehensive earnings
$35,198
$54,246
$56,002

12. Retained earnings at beginning of year.
$135,866
$147,687
$144,949
Net earnings
43,938
53,063
53,157
Cash dividends
(18,360
)
(18,078
)
(17,790

13. )
Stock dividends
(47,175
)
(46,806
)
(32,629
)
Retained earnings at end of year
$114,269
$135,866
$147,687

14. Earnings per share
$0.76
$0.90
$0.89
Average Common and Class B Common shares outstanding
57,892
58,685
59,425

15. (The accompanying notes are an integral part of these
statements.)
CONSOLIDATED STATEMENTS OF
Financial Position
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES (in
thousands except per share data)
Assets
December 31,
2011
2010
CURRENT ASSETS:
Cash and cash equivalents

16. $78,612
$115,976
Investments
10,895
7,996
Accounts receivable trade, less allowances of $1,731 and $1,531
41,895
37,394
Other receivables
3,391
9,961

17. Inventories:
Finished goods and work-in-process
42,676
35,416
Raw materials and supplies
29,084
21,236
Prepaid expenses
5,070

18. 6,499
Deferred income taxes
578
689
Total current assets
212,201
235,167
PROPERTY, PLANT AND EQUIPMENT, at cost:

19. Land
21,939
21,696
Buildings
107,567
102,934
Machinery and equipment
322,993
307,178
Construction in progress
2,598
9,243

20. 455,097
440,974
Less—Accumulated depreciation
242,935
225,482
Net property, plant and equipment
212,162
215,492
OTHER ASSETS:

21. Goodwill
73,237
73,237
Trademarks
175,024
175,024
Investments
96,161
64,461

22. Split dollar officer life insurance
74,209
74,441
Prepaid expenses
3,212
6,680
Equity method investment
3,935
4,254
Deferred income taxes
7,715

23. 9,203
Total other assets
433,493
407,300
Total assets
$857,856
$857,959
Liabilities and Shareholders’ Equity
December 31,
2011
2010

24. CURRENT LIABILITIES:
Accounts payable
$10,683
$9,791
Dividends payable
4,603
4,529
Accrued liabilities
43,069

25. 44,185
Total current liabilities
58,355
58,505
NONCURRENT LIABILITES:
Deferred income taxes
43,521
47,865
Postretirement health care and life insurance benefits

26. 26,108
20,689
Industrial development bonds
7,500
7,500
Liability for uncertain tax positions
8,345
9,835
Deferred compensation and other liabilities
48,092
46,157

27. Total noncurrent liabilities
133,566
132,046
SHAREHOLDERS’ EQUITY:
Common stock, $.69-4/9 par value—120,000 shares
authorized—36,479 and 36,057 respectively, issued
25,333
25,040
Class B common stock, $.69-4/9 par value—40,000 shares
authorized—21,025 and 20,466 respectively, issued
14,601

28. 14,212
Capital in excess of par value
533,677
505,495
Retained earnings, per accompanying statement
114,269
135,866
Accumulated other comprehensive loss
(19,953
)
(11,213
)

29. Treasury stock (at cost)—71 shares and 69 shares, respectively
(1,992
)
(1,992
)
Total shareholders’ equity
665,935
667,408
Total liabilities and shareholders’ equity
$857,856
$857,959
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
Cash Flows (in thousands)

30. For the year ended December 31,
2011
2010
2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings
$43,938

31. $53,063
$53,157
Adjustments to reconcile net earnings to net cash provided by
operating activities:
Depreciation
19,229
18,279
17,862

32. Impairment charges
—
—
14,000
Impairment of equity method investment
—
—
4,400
Loss from equity method investment

33. 194
342
233
Amortization of marketable security premiums
1,267
522
320
Changes in operating assets and liabilities:

34. Accounts receivable
(5,448
)
717
(5,899
)
Other receivables
3,963
(2,373
)
(2,088
)

35. Inventories
(15,631
)
(1,447
)
455
Prepaid expenses and other assets
5,106
4,936
5,203
Accounts payable and accrued liabilities
84

36. 2,180
(2,755
)
Income taxes payable and deferred
(5,772
)
2,322
(12,543
)
Postretirement health care and life insurance benefits
2,022
1,429
1,384

37. Deferred compensation and other liabilities
2,146
2,525
2,960
Others
(708
)
310
305
Net cash provided by operating activities

38. 50,390
82,805
76,994
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures
(16,351
)
(12,813
)
(20,831
)

39. Net purchase of trading securities
(3,234
)
(2,902
)
(1,713
)
Purchase of available for sale securities
(39,252
)
(9,301
)
(11,331
)
Sale and maturity of available for sale securities

40. 7,680
8,208
17,511
Net cash used in investing activities
(51,157
)
(16,808
)
(16,364
)
CASH FLOWS FROM FINANCING ACTIVITIES:

41. Shares repurchased and retired
(18,190
)
(22,881
)
(20,723
)
Dividends paid in cash
(18,407
)
(18,130
)
(17,825
)

42. Net cash used in financing activities
(36,597
)
(41,011
)
(38,548
)
Increase (decrease) in cash and cash equivalents
(37,364
)
24,986
22,082
Cash and cash equivalents at beginning of year
115,976
90,990
68,908

43. Cash and cash equivalents at end of year
$78,612
$115,976
$90,990
Supplemental cash flow information
Income taxes paid
$16,906

44. $20,586
$22,364
Interest paid
$38
$49
$182
Stock dividend issued
$47,053
$46,683
$32,538

45. (The accompanying notes are an integral part of these
statements.)
Five Year Summary of Earning and Financial Hightlights
TOOTISE ROLL. INDUSTRY, INC. AND SUBSIDIARIES
(Thousands of dollars except per share, percentage and ratio
figures)
2011
2010
2009
2008
2007
Sales and Earnings Data

46. Net product sales
$528,369
$517,149
$495,592
$492,051
$492,742
Product gross margin
163,144
167,815

47. 175,817
158,055
165,456
Interest expenses
121
142
243
378
535
Provision for income taxes
16,974
20,005

48. 9,892
16,347
25,401
Net earnings
43,938
53,063
53,157
38,880
52,175
% of net product sales
8.3
%

49. 10.3
%
10.7
%
7.9
%
10.6
%
% of shareholders' equity
6.6
%
8.0
%
8.1
%
6.1
%
8.1
%

50. Per Common Share Data

51. Net earnings
$0.76
$0.90
$0.89
$0.65
$0.85
Cash dvidends declared
0.32
0.32
0.32
0.32
0.32

52. Stock dividends
3
%
3
%
3
%
3
%
3
%

53. Additional Financial Data
Working capital
$153,846
$176,662
$154,409

54. $129,694
$142,163
Net cash provided by opreating activities
50,390
82,805
76,994
57,333
90,148
Net cash provided by (used by) investing activities
(51,157
)

55. (16,808
)
(16,364
)
(7,565
)
(43,429
)
Net cash used in financing activities
(36,597
)
(41,011
)
(38,548
)
(38,666
)
(44,842
)
Property, plant & equipment additions

56. 16,351
12,813
20,831
34,355
14,767
Net property, plant & equipment
212,162
215,492
220,721
217,628
201,401

57. Total assets
857,856
857,959
836,844
813,252
813,134
Long-term debt
7,500
7,500
7,500
7,500

58. 7,500
Shareholders' equity
665,935
667,408
654,244
636,847
640,204
Average shares outstanding
57,892
58,685
59,425

59. 60,152
61,580
Notes to Consolidated Financial Statements ($ in thousands)
Revenue recognition:
Products are sold to customers based on accepted purchase
orders which include quantity, sales price and other relevant
terms of sale. Revenue, net of applicable provisions for
discounts, returns, allowances and certain advertising and
promotional costs, is recognized when products are delivered to
customers and collectability is reasonably assured. Shipping and
handling costs of $45,850, $43,034, and $38,628 in 2011, 2010
and 2009, respectively, are included in selling, marketing and
administrative expenses. Accounts receivable are unsecured.
Revenues from a major customer aggregated approximately
23.3%, 21.4% and 22.9% of net product sales during the years
ended December 31, 2011, 2010 and 2009, respectively.
SEGMENT AND GEOGRAPHIC INFORMATION:
The Company operates as a single reportable segments
encompassing the manufacturing and sale of confectionery
products. Its principal manufacturing operations are located in
the United States and Canada, and its principal market is in the
United States. The Company also manufactures and sells
confectionery products in Mexico, and exports products to
Canada and countries worldwide.
The following geographic data includes net product sales
summarized on the basis of the customer location and long-lived

60. assets based on their location:
2011
2010
2009
Net product sales:
United states
$487,185
$471,714
$455,517
Foreign
41,184
45,435
40,075

61. $528,369
$517,149
$495,592
Long-lived assets:
United states
$170,173
$172,087
$176,044
Foreign
41,989
43,405
44,677
$212,162
$215,492

62. $220,721
Calculate the accounts receivable turnover and average
collection period for 2011. (Use “Net Product Sales.” Assume
all sales were credit sales.) (Round answers to 1 decimal place,
e.g. 15.2.)
Accounts receivable turnover
times
Average collection period
days
The financial statements of The Hershey Company and Tootsie
Roll are presented below.
THE HERSHEY COMPANY
CONSOLIDATED STATEMENTS OF INCOME
For the years ended December 31,
2011
2010
2009
In thousands of dollars except per share amounts

63. Net Sales
$6,080,788
$5,671,009
$5,298,668
Costs and Expenses:
Cost of sales
3,548,896
3,255,801
3,245,531

64. Selling, marketing and administrative
1,477,750
1,426,477
1,208,672
Business realignment and impairment (credits) charges, net
(886
)
83,433
82,875
Total costs and expenses
5,025,760
4,765,711
4,537,078
Income before Interest and Income Taxes
1,055,028

65. 905,298
761,590
Interest expense, net
92,183
96,434
90,459
Income before Income Taxes
962,845
808,864
671,131
Provision for income taxes
333,883
299,065
235,137
Net Income

66. $628,962
$509,799
$435,994
Net Income Per Share—Basic—Class B Common Stock
$2.58
$2.08
$1.77
Net Income Per Share—Diluted—Class B Common Stock
$2.56
$2.07
$1.77
Net Income Per Share—Basic—Common Stock
$2.85
$2.29

67. $1.97
Net Income Per Share—Diluted—Common Stock
$2.74
$2.21
$1.90
Cash Dividends Paid Per Share:
Common Stock
$1.3800
$1.2800
$1.1900
Class B Common Stock
1.2500

68. 1.1600
1.0712
The notes to consolidated financial statements are an integral
part of these statements and are included in the Hershey's 2011
Annual Report, available at www.thehersheycompany.com.
THE HERSHEY COMPANY
CONSOLIDATED BALANCE SHEETS
December 31,
2011
2010
In thousands of dollars
ASSETS

69. Current Assets:
Cash and cash equivalents
$693,686
$884,642
Accounts receivable—trade
399,499
390,061
Inventories
648,953

70. 533,622
Deferred income taxes
136,861
55,760
Prepaid expenses and other
167,559
141,132
Total current assets
2,046,558
2,005,217
Property, Plant and Equipment, Net
1,559,717

71. 1,437,702
Goodwill
516,745
524,134
Other Intangibles
111,913
123,080
Deferred Income Taxes
38,544
21,387
Other Assets
138,722

72. 161,212
Total assets
$4,412,199
$4,272,732
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable
$420,017

73. $410,655
Accrued liabilities
612,186
593,308
Accrued income taxes
1,899
9,402
Short-term debt
42,080
24,088
Current portion of long-term debt
97,593

74. 261,392
Total current liabilities
1,173,775
1,298,845
Long-term Debt
1,748,500
1,541,825
Other Long-term Liabilities
617,276
494,461
Total liabilities
3,539,551

75. 3,335,131
Commitments and Contingencies
—
—
Stockholders’ Equity:
The Hershey Company Stockholders’ Equity
Preferred Stock, shares issued: none in 2011 and 2010
—

76. —
Common Stock, shares issued: 299,269,702 in 2011 and
299,195,325 in 2010
299,269
299,195
Class B Common Stock, shares issued: 60,632,042 in 2011
and 60,706,419 in 2010
60,632
60,706
Additional paid-in capital
490,817
434,865
Retained earnings

77. 4,699,597
4,374,718
Treasury—Common Stock shares, at cost: 134,695,826 in
2011 and 132,871,512 in 2010
(4,258,962
)
(4,052,101
)
Accumulated other comprehensive loss
(442,331
)
(215,067
)
The Hershey Company stockholders’ equity
849,022
902,316

78. Noncontrolling interests in subsidiaries
23,626
35,285
Total stockholders’ equity
872,648
937,601
Total liabilities and stockholders’equity
$4,412,199
$4,272,732
THE HERSHEY COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31,
2011

79. 2010
2009
In thousands of dollars
Cash Flows Provided from (Used by) Operating Activities
Net income
$628,962
$509,799

80. $435,994
Adjustments to reconcile net income to net cash provided from
operations:
Depreciation and amortization
215,763
197,116
182,411
Stock-based compensation expense, net of tax of $15,127,
$17,413 and $19,223, respectively

81. 28,341
32,055
34,927
Excess tax benefits from stock-based compensation
(13,997
)
(1,385
)
(4,455
)
Deferred income taxes
33,611
(18,654
)
(40,578
)

82. Gain on sale of trademark licensing rights, net of tax of $5,962
(11,072
)
—
—
Business realignment and impairment charges, net of tax of
$18,333, $20,635 and $38,308, respectively
30,838
77,935
60,823
Contributions to pension plans
(8,861
)
(6,073
)

83. (54,457
)
Changes in assets and liabilities, net of effects from business
acquisitions and divestitures:
Accounts receivable—trade
(9,438
)
20,329
46,584
Inventories
(115,331

84. )
(13,910
)
74,000
Accounts payable
7,860
90,434
37,228
Other assets and liabilities
(205,809
)
13,777
293,272
Net Cash Provided from Operating Activities

85. 580,867
901,423
1,065,749
Cash Flows Provided from (Used by) Investing Activities
Capital additions
(323,961
)
(179,538
)
(126,324
)

86. Capitalized software additions
(23,606
)
(21,949
)
(19,146
)
Proceeds from sales of property, plant and equipment
312
2,201
10,364
Proceeds from sales of trademark licensing rights
20,000
—
—

87. Business acquisitions
(5,750
)
—
(15,220
)
Net Cash (Used by) Investing Activities
(333,005
)
(199,286
)
(150,326
)
Cash Flows Provided from (Used by) Financing Activities

88. Net change in short-term borrowings
10,834
1,156
(458,047
)
Long-term borrowings
249,126
348,208
—
Repayment of long-term debt
(256,189
)

89. (71,548
)
(8,252
)
Proceeds from lease financing agreement
47,601
—
—
Cash dividends paid
(304,083
)
(283,434
)
(263,403
)
Exercise of stock options

90. 184,411
92,033
28,318
Excess tax benefits from stock-based compensation
13,997
1,385
4,455
Contributions from noncontrolling interests in subsidiaries
—
10,199
7,322

91. Repurchase of Common Stock
(384,515
)
(169,099
)
(9,314
)
Net Cash (Used by) Financing Activities
(438,818
)
(71,100
)
(698,921
)
(Decrease) Increase in Cash and Cash Equivalents
(190,956
)
631,037
216,502

92. Cash and Cash Equivalents as of January 1
884,642
253,605
37,103
Cash and Cash Equivalents as of December 31
$693,686
$884,642
$253,605
Interest Paid
$97,892
$97,932
$91,623

93. Income Taxes Paid
292,315
350,948
252,230
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
Earnings, Comprehensive Earnings and Retained Earnings (in
thousands except per share data)
For the year ended December 31,
2011
2010
2009
Net product sales
$528,369

94. $517,149
$495,592
Rental and royalty revenue
4,136
4,299
3,739
Total revenue
532,505
521,448
499,331
Product cost of goods sold
365,225

95. 349,334
319,775
Rental and royalty cost
1,038
1,088
852
Total costs
366,263
350,422
320,627
Product gross margin
163,144

96. 167,815
175,817
Rental and royalty gross margin
3,098
3,211
2,887
Total gross margin
166,242
171,026
178,704
Selling, marketing and administrative expenses
108,276

97. 106,316
103,755
Impairment charges
—
—
14,000
Earnings from operations
57,966
64,710
60,949
Other income (expense), net
2,946

98. 8,358
2,100
Earnings before income taxes
60,912
73,068
63,049
Provision for income taxes
16,974
20,005
9,892
Net earnings
$43,938

99. $53,063
$53,157
Net earnings
$43,938
$53,063
$53,157
Other comprehensive earnings (loss)
(8,740
)

100. 1,183
2,845
Comprehensive earnings
$35,198
$54,246
$56,002
Retained earnings at beginning of year.
$135,866

101. $147,687
$144,949
Net earnings
43,938
53,063
53,157
Cash dividends
(18,360
)
(18,078
)
(17,790
)
Stock dividends
(47,175
)

102. (46,806
)
(32,629
)
Retained earnings at end of year
$114,269
$135,866
$147,687
Earnings per share
$0.76

103. $0.90
$0.89
Average Common and Class B Common shares outstanding
57,892
58,685
59,425
(The accompanying notes are an integral part of these
statements.)
CONSOLIDATED STATEMENTS OF

104. Financial Position
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES (in
thousands except per share data)
Assets
December 31,
2011
2010
CURRENT ASSETS:
Cash and cash equivalents
$78,612
$115,976

105. Investments
10,895
7,996
Accounts receivable trade, less allowances of $1,731 and $1,531
41,895
37,394
Other receivables
3,391
9,961
Inventories:

106. Finished goods and work-in-process
42,676
35,416
Raw materials and supplies
29,084
21,236
Prepaid expenses
5,070
6,499
Deferred income taxes

107. 578
689
Total current assets
212,201
235,167
PROPERTY, PLANT AND EQUIPMENT, at cost:
Land
21,939
21,696

108. Buildings
107,567
102,934
Machinery and equipment
322,993
307,178
Construction in progress
2,598
9,243
455,097

109. 440,974
Less—Accumulated depreciation
242,935
225,482
Net property, plant and equipment
212,162
215,492
OTHER ASSETS:
Goodwill

110. 73,237
73,237
Trademarks
175,024
175,024
Investments
96,161
64,461
Split dollar officer life insurance
74,209
74,441

111. Prepaid expenses
3,212
6,680
Equity method investment
3,935
4,254
Deferred income taxes
7,715
9,203
Total other assets
433,493

112. 407,300
Total assets
$857,856
$857,959
Liabilities and Shareholders’ Equity
December 31,
2011
2010
CURRENT LIABILITIES:

113. Accounts payable
$10,683
$9,791
Dividends payable
4,603
4,529
Accrued liabilities
43,069
44,185
Total current liabilities
58,355

114. 58,505
NONCURRENT LIABILITES:
Deferred income taxes
43,521
47,865
Postretirement health care and life insurance benefits
26,108
20,689

115. Industrial development bonds
7,500
7,500
Liability for uncertain tax positions
8,345
9,835
Deferred compensation and other liabilities
48,092
46,157
Total noncurrent liabilities
133,566
132,046

116. SHAREHOLDERS’ EQUITY:
Common stock, $.69-4/9 par value—120,000 shares
authorized—36,479 and 36,057 respectively, issued
25,333
25,040
Class B common stock, $.69-4/9 par value—40,000 shares
authorized—21,025 and 20,466 respectively, issued
14,601
14,212
Capital in excess of par value

117. 533,677
505,495
Retained earnings, per accompanying statement
114,269
135,866
Accumulated other comprehensive loss
(19,953
)
(11,213
)
Treasury stock (at cost)—71 shares and 69 shares, respectively
(1,992
)
(1,992
)

118. Total shareholders’ equity
665,935
667,408
Total liabilities and shareholders’ equity
$857,856
$857,959
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
Cash Flows (in thousands)
For the year ended December 31,

119. 2011
2010
2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings
$43,938
$53,063
$53,157

120. Adjustments to reconcile net earnings to net cash provided by
operating activities:
Depreciation
19,229
18,279
17,862
Impairment charges
—

121. —
14,000
Impairment of equity method investment
—
—
4,400
Loss from equity method investment
194
342
233

122. Amortization of marketable security premiums
1,267
522
320
Changes in operating assets and liabilities:

123. Accounts receivable
(5,448
)
717
(5,899
)
Other receivables
3,963
(2,373
)
(2,088
)
Inventories
(15,631
)
(1,447

124. )
455
Prepaid expenses and other assets
5,106
4,936
5,203
Accounts payable and accrued liabilities
84
2,180
(2,755
)

125. Income taxes payable and deferred
(5,772
)
2,322
(12,543
)
Postretirement health care and life insurance benefits
2,022
1,429
1,384
Deferred compensation and other liabilities
2,146

126. 2,525
2,960
Others
(708
)
310
305
Net cash provided by operating activities
50,390
82,805
76,994

127. CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures
(16,351
)
(12,813
)
(20,831
)
Net purchase of trading securities
(3,234

128. )
(2,902
)
(1,713
)
Purchase of available for sale securities
(39,252
)
(9,301
)
(11,331
)
Sale and maturity of available for sale securities
7,680
8,208
17,511

129. Net cash used in investing activities
(51,157
)
(16,808
)
(16,364
)
CASH FLOWS FROM FINANCING ACTIVITIES:
Shares repurchased and retired

130. (18,190
)
(22,881
)
(20,723
)
Dividends paid in cash
(18,407
)
(18,130
)
(17,825
)
Net cash used in financing activities
(36,597
)
(41,011
)

131. (38,548
)
Increase (decrease) in cash and cash equivalents
(37,364
)
24,986
22,082
Cash and cash equivalents at beginning of year
115,976
90,990
68,908
Cash and cash equivalents at end of year
$78,612

132. $115,976
$90,990
Supplemental cash flow information
Income taxes paid
$16,906
$20,586
$22,364

133. Interest paid
$38
$49
$182
Stock dividend issued
$47,053
$46,683
$32,538
(The accompanying notes are an integral part of these
statements.)
Based on the information contained in these financial
statements, compute the following 2011 values for each
company. (Round answers to 1 decimal place, e.g. 15.2.)

134. (1)
Accounts receivable turnover. (For Tootsie Roll, use “Net
product sales.” Assume all sales were credit sales.)
(2)
Average collection period for accounts receivable.
Tootsie Roll
Hershey Company
Accounts receivable turnover
times
times
Average collection period
days
days
Exercise 8-4
The ledger of Wainwright Company at the end of the current
year shows Accounts Receivable $76,000; Credit Sales
$986,000; and Sales Returns and Allowances $42,200. (Credit
account titles are automatically indented when amount is

135. entered. Do not indent manually.)
(a)
If Wainwright uses the direct write-off method to account for
uncollectible accounts, journalize the adjusting entry at
December 31, assuming Wainwright determines that Hiller’s
$1,000 balance is uncollectible.
(b)
If Allowance for Doubtful Accounts has a credit balance of
$1,200 in the trial balance, journalize the adjusting entry at
December 31, assuming bad debts are expected to be 11% of
accounts receivable.
(c)
If Allowance for Doubtful Accounts has a debit balance of
$950 in the trial balance, journalize the adjusting entry at
December 31, assuming bad debts are expected to be 8% of
accounts receivable.
No.
Account Titles and Explanation
Debit
Credit
(a)
(b)

136. (c)
Exercise 8-11
Suppose the following information was taken from the 2014
financial statements of FedEx Corporation, a major global
transportation/delivery company.
(in millions)
2014
2013
Accounts receivable (gross)
$ 3,678
$ 4,608
Accounts receivable (net)
3,374

137. 4,330
Allowance for doubtful accounts
304
278
Sales revenue
34,275
37,054
Total current assets
7,104
7,206
Answer each of the following questions.
Calculate the accounts receivable turnover and the average
collection period for 2014 for FedEx. (Round answers to 1
decimal place, e.g. 12.5. Use 365 days for calculation.)
Accounts receivable turnover
times
The average collection period for 2014

138. days
Broadening Your Perspective 8-1
The financial statements of Tootsie Roll are presented below.
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
Earnings, Comprehensive Earnings and Retained Earnings (in
thousands except per share data)
For the year ended December 31,
2011
2010
2009
Net product sales
$528,369

139. $517,149
$495,592
Rental and royalty revenue
4,136
4,299
3,739
Total revenue
532,505
521,448
499,331
Product cost of goods sold
365,225

140. 349,334
319,775
Rental and royalty cost
1,038
1,088
852
Total costs
366,263
350,422
320,627
Product gross margin
163,144

141. 167,815
175,817
Rental and royalty gross margin
3,098
3,211
2,887
Total gross margin
166,242
171,026
178,704
Selling, marketing and administrative expenses
108,276

142. 106,316
103,755
Impairment charges
—
—
14,000
Earnings from operations
57,966
64,710
60,949
Other income (expense), net
2,946

143. 8,358
2,100
Earnings before income taxes
60,912
73,068
63,049
Provision for income taxes
16,974
20,005
9,892
Net earnings
$43,938

144. $53,063
$53,157
Net earnings
$43,938
$53,063
$53,157
Other comprehensive earnings (loss)
(8,740
)

145. 1,183
2,845
Comprehensive earnings
$35,198
$54,246
$56,002
Retained earnings at beginning of year.
$135,866

146. $147,687
$144,949
Net earnings
43,938
53,063
53,157
Cash dividends
(18,360
)
(18,078
)
(17,790
)
Stock dividends
(47,175
)

147. (46,806
)
(32,629
)
Retained earnings at end of year
$114,269
$135,866
$147,687
Earnings per share
$0.76

148. $0.90
$0.89
Average Common and Class B Common shares outstanding
57,892
58,685
59,425
(The accompanying notes are an integral part of these
statements.)

149. CONSOLIDATED STATEMENTS OF
Financial Position
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES (in
thousands except per share data)
Assets
December 31,
2011
2010
CURRENT ASSETS:
Cash and cash equivalents
$78,612
$115,976

150. Investments
10,895
7,996
Accounts receivable trade, less allowances of $1,731 and $1,531
41,895
37,394
Other receivables
3,391
9,961
Inventories:

151. Finished goods and work-in-process
42,676
35,416
Raw materials and supplies
29,084
21,236
Prepaid expenses
5,070
6,499

152. Deferred income taxes
578
689
Total current assets
212,201
235,167
PROPERTY, PLANT AND EQUIPMENT, at cost:
Land
21,939
21,696

153. Buildings
107,567
102,934
Machinery and equipment
322,993
307,178
Construction in progress
2,598
9,243
455,097

154. 440,974
Less—Accumulated depreciation
242,935
225,482
Net property, plant and equipment
212,162
215,492
OTHER ASSETS:

155. Goodwill
73,237
73,237
Trademarks
175,024
175,024
Investments
96,161
64,461
Split dollar officer life insurance
74,209
74,441

156. Prepaid expenses
3,212
6,680
Equity method investment
3,935
4,254
Deferred income taxes
7,715
9,203
Total other assets

157. 433,493
407,300
Total assets
$857,856
$857,959
Liabilities and Shareholders’ Equity
December 31,
2011
2010
CURRENT LIABILITIES:

158. Accounts payable
$10,683
$9,791
Dividends payable
4,603
4,529
Accrued liabilities
43,069
44,185
Total current liabilities

159. 58,355
58,505
NONCURRENT LIABILITES:
Deferred income taxes
43,521
47,865
Postretirement health care and life insurance benefits
26,108
20,689

160. Industrial development bonds
7,500
7,500
Liability for uncertain tax positions
8,345
9,835
Deferred compensation and other liabilities
48,092
46,157
Total noncurrent liabilities
133,566

161. 132,046
SHAREHOLDERS’ EQUITY:
Common stock, $.69-4/9 par value—120,000 shares
authorized—36,479 and 36,057 respectively, issued
25,333
25,040
Class B common stock, $.69-4/9 par value—40,000 shares
authorized—21,025 and 20,466 respectively, issued
14,601
14,212

162. Capital in excess of par value
533,677
505,495
Retained earnings, per accompanying statement
114,269
135,866
Accumulated other comprehensive loss
(19,953
)
(11,213
)
Treasury stock (at cost)—71 shares and 69 shares, respectively
(1,992
)
(1,992

163. )
Total shareholders’ equity
665,935
667,408
Total liabilities and shareholders’ equity
$857,856
$857,959
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
Cash Flows (in thousands)
For the year ended December 31,

164. 2011
2010
2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings
$43,938
$53,063
$53,157

165. Adjustments to reconcile net earnings to net cash provided by
operating activities:
Depreciation
19,229
18,279
17,862
Impairment charges

166. —
—
14,000
Impairment of equity method investment
—
—
4,400
Loss from equity method investment
194
342

167. 233
Amortization of marketable security premiums
1,267
522
320
Changes in operating assets and liabilities:

168. Accounts receivable
(5,448
)
717
(5,899
)
Other receivables
3,963
(2,373
)
(2,088
)
Inventories
(15,631
)

169. (1,447
)
455
Prepaid expenses and other assets
5,106
4,936
5,203
Accounts payable and accrued liabilities
84
2,180
(2,755
)

170. Income taxes payable and deferred
(5,772
)
2,322
(12,543
)
Postretirement health care and life insurance benefits
2,022
1,429
1,384
Deferred compensation and other liabilities

171. 2,146
2,525
2,960
Others
(708
)
310
305
Net cash provided by operating activities
50,390
82,805
76,994

172. CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures
(16,351
)
(12,813
)
(20,831
)
Net purchase of trading securities

173. (3,234
)
(2,902
)
(1,713
)
Purchase of available for sale securities
(39,252
)
(9,301
)
(11,331
)
Sale and maturity of available for sale securities
7,680
8,208

174. 17,511
Net cash used in investing activities
(51,157
)
(16,808
)
(16,364
)
CASH FLOWS FROM FINANCING ACTIVITIES:
Shares repurchased and retired

175. (18,190
)
(22,881
)
(20,723
)
Dividends paid in cash
(18,407
)
(18,130
)
(17,825
)
Net cash used in financing activities
(36,597
)
(41,011
)

176. (38,548
)
Increase (decrease) in cash and cash equivalents
(37,364
)
24,986
22,082
Cash and cash equivalents at beginning of year
115,976
90,990
68,908
Cash and cash equivalents at end of year
$78,612

177. $115,976
$90,990
Supplemental cash flow information
Income taxes paid
$16,906
$20,586
$22,364

178. Interest paid
$38
$49
$182
Stock dividend issued
$47,053
$46,683
$32,538
(The accompanying notes are an integral part of these
statements.)
Five Year Summary of Earning and Financial Hightlights
TOOTISE ROLL. INDUSTRY, INC. AND SUBSIDIARIES

179. (Thousands of dollars except per share, percentage and ratio
figures)
2011
2010
2009
2008
2007
Sales and Earnings Data

180. Net product sales
$528,369
$517,149
$495,592
$492,051
$492,742
Product gross margin
163,144
167,815
175,817
158,055
165,456

181. Interest expenses
121
142
243
378
535
Provision for income taxes
16,974
20,005
9,892
16,347

182. 25,401
Net earnings
43,938
53,063
53,157
38,880
52,175
% of net product sales
8.3
%
10.3
%
10.7
%

183. 7.9
%
10.6
%
% of shareholders' equity
6.6
%
8.0
%
8.1
%
6.1
%
8.1
%

184. Per Common Share Data
Net earnings
$0.76
$0.90

185. $0.89
$0.65
$0.85
Cash dvidends declared
0.32
0.32
0.32
0.32
0.32
Stock dividends

186. 3
%
3
%
3
%
3
%
3
%

187. Additional Financial Data
Working capital
$153,846
$176,662
$154,409
$129,694
$142,163

188. Net cash provided by opreating activities
50,390
82,805
76,994
57,333
90,148
Net cash provided by (used by) investing activities
(51,157
)
(16,808
)
(16,364
)
(7,565

189. )
(43,429
)
Net cash used in financing activities
(36,597
)
(41,011
)
(38,548
)
(38,666
)
(44,842
)
Property, plant & equipment additions
16,351
12,813

190. 20,831
34,355
14,767
Net property, plant & equipment
212,162
215,492
220,721
217,628
201,401
Total assets
857,856

191. 857,959
836,844
813,252
813,134
Long-term debt
7,500
7,500
7,500
7,500
7,500
Shareholders' equity

192. 665,935
667,408
654,244
636,847
640,204
Average shares outstanding
57,892
58,685
59,425
60,152
61,580

193. Notes to Consolidated Financial Statements ($ in thousands)
Revenue recognition:
Products are sold to customers based on accepted purchase
orders which include quantity, sales price and other relevant
terms of sale. Revenue, net of applicable provisions for
discounts, returns, allowances and certain advertising and
promotional costs, is recognized when products are delivered to
customers and collectability is reasonably assured. Shipping and
handling costs of $45,850, $43,034, and $38,628 in 2011, 2010
and 2009, respectively, are included in selling, marketing and
administrative expenses. Accounts receivable are unsecured.
Revenues from a major customer aggregated approximately
23.3%, 21.4% and 22.9% of net product sales during the years
ended December 31, 2011, 2010 and 2009, respectively.
SEGMENT AND GEOGRAPHIC INFORMATION:
The Company operates as a single reportable segments
encompassing the manufacturing and sale of confectionery
products. Its principal manufacturing operations are located in
the United States and Canada, and its principal market is in the
United States. The Company also manufactures and sells
confectionery products in Mexico, and exports products to
Canada and countries worldwide.
The following geographic data includes net product sales
summarized on the basis of the customer location and long-lived
assets based on their location:
2011
2010

194. 2009
Net product sales:
United states
$487,185
$471,714
$455,517
Foreign
41,184
45,435
40,075
$528,369
$517,149
$495,592
Long-lived assets:

195. United states
$170,173
$172,087
$176,044
Foreign
41,989
43,405
44,677
$212,162
$215,492
$220,721
Calculate the accounts receivable turnover and average
collection period for 2011. (Use “Net Product Sales.” Assume
all sales were credit sales.) (Round answers to 1 decimal place,

196. e.g. 15.2.)
Accounts receivable turnover
times
Average collection period
days
The financial statements of The Hershey Company and Tootsie
Roll are presented below.
THE HERSHEY COMPANY
CONSOLIDATED STATEMENTS OF INCOME
For the years ended December 31,
2011
2010
2009
In thousands of dollars except per share amounts

197. Net Sales
$6,080,788
$5,671,009
$5,298,668
Costs and Expenses:
Cost of sales
3,548,896
3,255,801
3,245,531
Selling, marketing and administrative
1,477,750
1,426,477

198. 1,208,672
Business realignment and impairment (credits) charges, net
(886
)
83,433
82,875
Total costs and expenses
5,025,760
4,765,711
4,537,078
Income before Interest and Income Taxes
1,055,028
905,298
761,590
Interest expense, net

199. 92,183
96,434
90,459
Income before Income Taxes
962,845
808,864
671,131
Provision for income taxes
333,883
299,065
235,137
Net Income
$628,962
$509,799
$435,994

200. Net Income Per Share—Basic—Class B Common Stock
$2.58
$2.08
$1.77
Net Income Per Share—Diluted—Class B Common Stock
$2.56
$2.07
$1.77
Net Income Per Share—Basic—Common Stock
$2.85
$2.29
$1.97
Net Income Per Share—Diluted—Common Stock
$2.74

201. $2.21
$1.90
Cash Dividends Paid Per Share:
Common Stock
$1.3800
$1.2800
$1.1900
Class B Common Stock
1.2500
1.1600
1.0712

202. The notes to consolidated financial statements are an integral
part of these statements and are included in the Hershey's 2011
Annual Report, available at www.thehersheycompany.com.
THE HERSHEY COMPANY
CONSOLIDATED BALANCE SHEETS
December 31,
2011
2010
In thousands of dollars
ASSETS
Current Assets:

203. Cash and cash equivalents
$693,686
$884,642
Accounts receivable—trade
399,499
390,061
Inventories
648,953
533,622
Deferred income taxes

204. 136,861
55,760
Prepaid expenses and other
167,559
141,132
Total current assets
2,046,558
2,005,217
Property, Plant and Equipment, Net
1,559,717
1,437,702
Goodwill

205. 516,745
524,134
Other Intangibles
111,913
123,080
Deferred Income Taxes
38,544
21,387
Other Assets
138,722
161,212
Total assets

206. $4,412,199
$4,272,732
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable
$420,017
$410,655
Accrued liabilities

207. 612,186
593,308
Accrued income taxes
1,899
9,402
Short-term debt
42,080
24,088
Current portion of long-term debt
97,593
261,392
Total current liabilities

208. 1,173,775
1,298,845
Long-term Debt
1,748,500
1,541,825
Other Long-term Liabilities
617,276
494,461
Total liabilities
3,539,551
3,335,131
Commitments and Contingencies

209. —
—
Stockholders’ Equity:
The Hershey Company Stockholders’ Equity
Preferred Stock, shares issued: none in 2011 and 2010
—
—
Common Stock, shares issued: 299,269,702 in 2011 and

210. 299,195,325 in 2010
299,269
299,195
Class B Common Stock, shares issued: 60,632,042 in 2011
and 60,706,419 in 2010
60,632
60,706
Additional paid-in capital
490,817
434,865
Retained earnings
4,699,597
4,374,718

211. Treasury—Common Stock shares, at cost: 134,695,826 in
2011 and 132,871,512 in 2010
(4,258,962
)
(4,052,101
)
Accumulated other comprehensive loss
(442,331
)
(215,067
)
The Hershey Company stockholders’ equity
849,022
902,316
Noncontrolling interests in subsidiaries
23,626
35,285

212. Total stockholders’ equity
872,648
937,601
Total liabilities and stockholders’equity
$4,412,199
$4,272,732
THE HERSHEY COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31,
2011
2010
2009
In thousands of dollars

213. Cash Flows Provided from (Used by) Operating Activities
Net income
$628,962
$509,799
$435,994

214. Adjustments to reconcile net income to net cash provided from
operations:
Depreciation and amortization
215,763
197,116
182,411
Stock-based compensation expense, net of tax of $15,127,
$17,413 and $19,223, respectively
28,341
32,055

215. 34,927
Excess tax benefits from stock-based compensation
(13,997
)
(1,385
)
(4,455
)
Deferred income taxes
33,611
(18,654
)
(40,578
)
Gain on sale of trademark licensing rights, net of tax of $5,962
(11,072
)

216. —
—
Business realignment and impairment charges, net of tax of
$18,333, $20,635 and $38,308, respectively
30,838
77,935
60,823
Contributions to pension plans
(8,861
)
(6,073
)
(54,457
)
Changes in assets and liabilities, net of effects from business

217. acquisitions and divestitures:
Accounts receivable—trade
(9,438
)
20,329
46,584
Inventories
(115,331
)
(13,910
)
74,000

218. Accounts payable
7,860
90,434
37,228
Other assets and liabilities
(205,809
)
13,777
293,272
Net Cash Provided from Operating Activities
580,867
901,423

219. 1,065,749
Cash Flows Provided from (Used by) Investing Activities
Capital additions
(323,961
)
(179,538
)
(126,324
)
Capitalized software additions
(23,606
)
(21,949

220. )
(19,146
)
Proceeds from sales of property, plant and equipment
312
2,201
10,364
Proceeds from sales of trademark licensing rights
20,000
—
—
Business acquisitions
(5,750

221. )
—
(15,220
)
Net Cash (Used by) Investing Activities
(333,005
)
(199,286
)
(150,326
)
Cash Flows Provided from (Used by) Financing Activities
Net change in short-term borrowings

222. 10,834
1,156
(458,047
)
Long-term borrowings
249,126
348,208
—
Repayment of long-term debt
(256,189
)
(71,548
)
(8,252
)

223. Proceeds from lease financing agreement
47,601
—
—
Cash dividends paid
(304,083
)
(283,434
)
(263,403
)
Exercise of stock options
184,411
92,033
28,318

224. Excess tax benefits from stock-based compensation
13,997
1,385
4,455
Contributions from noncontrolling interests in subsidiaries
—
10,199
7,322
Repurchase of Common Stock
(384,515
)
(169,099

225. )
(9,314
)
Net Cash (Used by) Financing Activities
(438,818
)
(71,100
)
(698,921
)
(Decrease) Increase in Cash and Cash Equivalents
(190,956
)
631,037
216,502
Cash and Cash Equivalents as of January 1
884,642
253,605

226. 37,103
Cash and Cash Equivalents as of December 31
$693,686
$884,642
$253,605
Interest Paid
$97,892
$97,932
$91,623
Income Taxes Paid
292,315
350,948

227. 252,230
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
Earnings, Comprehensive Earnings and Retained Earnings (in
thousands except per share data)
For the year ended December 31,
2011
2010
2009
Net product sales
$528,369
$517,149
$495,592

228. Rental and royalty revenue
4,136
4,299
3,739
Total revenue
532,505
521,448
499,331
Product cost of goods sold
365,225
349,334
319,775

229. Rental and royalty cost
1,038
1,088
852
Total costs
366,263
350,422
320,627
Product gross margin
163,144
167,815
175,817

230. Rental and royalty gross margin
3,098
3,211
2,887
Total gross margin
166,242
171,026
178,704
Selling, marketing and administrative expenses
108,276
106,316
103,755

231. Impairment charges
—
—
14,000
Earnings from operations
57,966
64,710
60,949
Other income (expense), net
2,946
8,358
2,100

232. Earnings before income taxes
60,912
73,068
63,049
Provision for income taxes
16,974
20,005
9,892
Net earnings
$43,938
$53,063
$53,157

233. Net earnings
$43,938
$53,063
$53,157
Other comprehensive earnings (loss)
(8,740
)
1,183
2,845

234. Comprehensive earnings
$35,198
$54,246
$56,002
Retained earnings at beginning of year.
$135,866
$147,687
$144,949

235. Net earnings
43,938
53,063
53,157
Cash dividends
(18,360
)
(18,078
)
(17,790
)
Stock dividends
(47,175
)
(46,806
)
(32,629
)

236. Retained earnings at end of year
$114,269
$135,866
$147,687
Earnings per share
$0.76
$0.90
$0.89

237. Average Common and Class B Common shares outstanding
57,892
58,685
59,425
(The accompanying notes are an integral part of these
statements.)
CONSOLIDATED STATEMENTS OF
Financial Position
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES (in
thousands except per share data)
Assets
December 31,

238. 2011
2010
CURRENT ASSETS:
Cash and cash equivalents
$78,612
$115,976
Investments
10,895
7,996

239. Accounts receivable trade, less allowances of $1,731 and $1,531
41,895
37,394
Other receivables
3,391
9,961
Inventories:
Finished goods and work-in-process

240. 42,676
35,416
Raw materials and supplies
29,084
21,236
Prepaid expenses
5,070
6,499
Deferred income taxes
578
689

241. Total current assets
212,201
235,167
PROPERTY, PLANT AND EQUIPMENT, at cost:
Land
21,939
21,696
Buildings
107,567

242. 102,934
Machinery and equipment
322,993
307,178
Construction in progress
2,598
9,243
455,097
440,974
Less—Accumulated depreciation

243. 242,935
225,482
Net property, plant and equipment
212,162
215,492
OTHER ASSETS:
Goodwill
73,237
73,237

244. Trademarks
175,024
175,024
Investments
96,161
64,461
Split dollar officer life insurance
74,209
74,441
Prepaid expenses
3,212

245. 6,680
Equity method investment
3,935
4,254
Deferred income taxes
7,715
9,203
Total other assets
433,493
407,300

246. Total assets
$857,856
$857,959
Liabilities and Shareholders’ Equity
December 31,
2011
2010
CURRENT LIABILITIES:
Accounts payable
$10,683

247. $9,791
Dividends payable
4,603
4,529
Accrued liabilities
43,069
44,185
Total current liabilities
58,355
58,505
NONCURRENT LIABILITES:

248. Deferred income taxes
43,521
47,865
Postretirement health care and life insurance benefits
26,108
20,689
Industrial development bonds
7,500
7,500

249. Liability for uncertain tax positions
8,345
9,835
Deferred compensation and other liabilities
48,092
46,157
Total noncurrent liabilities
133,566
132,046
SHAREHOLDERS’ EQUITY:

250. Common stock, $.69-4/9 par value—120,000 shares
authorized—36,479 and 36,057 respectively, issued
25,333
25,040
Class B common stock, $.69-4/9 par value—40,000 shares
authorized—21,025 and 20,466 respectively, issued
14,601
14,212
Capital in excess of par value
533,677
505,495

251. Retained earnings, per accompanying statement
114,269
135,866
Accumulated other comprehensive loss
(19,953
)
(11,213
)
Treasury stock (at cost)—71 shares and 69 shares, respectively
(1,992
)
(1,992
)
Total shareholders’ equity
665,935

252. 667,408
Total liabilities and shareholders’ equity
$857,856
$857,959
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
Cash Flows (in thousands)
For the year ended December 31,
2011
2010
2009

253. CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings
$43,938
$53,063
$53,157
Adjustments to reconcile net earnings to net cash provided by
operating activities:

254. Depreciation
19,229
18,279
17,862
Impairment charges
—
—
14,000

255. Impairment of equity method investment
—
—
4,400
Loss from equity method investment
194
342
233
Amortization of marketable security premiums

256. 1,267
522
320
Changes in operating assets and liabilities:
Accounts receivable
(5,448
)
717

257. (5,899
)
Other receivables
3,963
(2,373
)
(2,088
)
Inventories
(15,631
)
(1,447
)
455

258. Prepaid expenses and other assets
5,106
4,936
5,203
Accounts payable and accrued liabilities
84
2,180
(2,755
)
Income taxes payable and deferred
(5,772
)

259. 2,322
(12,543
)
Postretirement health care and life insurance benefits
2,022
1,429
1,384
Deferred compensation and other liabilities
2,146
2,525
2,960

260. Others
(708
)
310
305
Net cash provided by operating activities
50,390
82,805
76,994
CASH FLOWS FROM INVESTING ACTIVITIES:

261. Capital expenditures
(16,351
)
(12,813
)
(20,831
)
Net purchase of trading securities
(3,234
)
(2,902
)
(1,713
)

262. Purchase of available for sale securities
(39,252
)
(9,301
)
(11,331
)
Sale and maturity of available for sale securities
7,680
8,208
17,511
Net cash used in investing activities

263. (51,157
)
(16,808
)
(16,364
)
CASH FLOWS FROM FINANCING ACTIVITIES:
Shares repurchased and retired
(18,190
)
(22,881
)
(20,723

264. )
Dividends paid in cash
(18,407
)
(18,130
)
(17,825
)
Net cash used in financing activities
(36,597
)
(41,011
)
(38,548
)
Increase (decrease) in cash and cash equivalents

265. (37,364
)
24,986
22,082
Cash and cash equivalents at beginning of year
115,976
90,990
68,908
Cash and cash equivalents at end of year
$78,612
$115,976
$90,990

266. Supplemental cash flow information
Income taxes paid
$16,906
$20,586
$22,364
Interest paid
$38

267. $49
$182
Stock dividend issued
$47,053
$46,683
$32,538
(The accompanying notes are an integral part of these
statements.)
Based on the information contained in these financial
statements, compute the following 2011 values for each
company. (Round answers to 1 decimal place, e.g. 15.2.)
(1)
Accounts receivable turnover. (For Tootsie Roll, use “Net
product sales.” Assume all sales were credit sales.)
(2)
Average collection period for accounts receivable.

268. Tootsie Roll
Hershey Company
Accounts receivable turnover
times
times
Average collection period
days
days