Please do not use the answer below; it has already been used. Please format it like the example below. Please give brief explanation of how you achieved calculations. Huffman Trucking Balance Sheet (Unaudited) December 31st 2006 2005 (In Thousands) Assets Current Assets Cash & Cash Equivalents $51,993 $38,893 Accounts Receivable 56,292 57,441 Prepaid Expenses & Supplies 3,443 3,343 Total Current Assets $111,728 $99,677 Carrier Operating Property (at cost) $73,024 $70,957 Less: Allowance for Depreciation (57,536) (55,477) Net Carrier Operating Property $15,488 $15,480 Assets of Discontinued Operations 16,192 18,891 Goodwill (net) 57,767 53,977 Other Assets 26,613 24,194 Total Assets $227,788 $212,219 Liabilities and Shareholders' Equity Current Liabilities Accounts Payable $47,124 $39,936 Salaries & Wages 29,753 27,048 Current Portion of Long-Term Debt 2,204 2,514 Freight & Casualty Claims Payable 9,746 8,941 Total Current Liabilities $88,827 $78,439 Long-Term Liabilities Accrued Pension & Post-Retirement Health Care $58,362 $52,721 Long-Term Debt 13,431 15,318 Total Long-Term Liabilities $71,793 $68,039 Shareholders' Equity Common Stock ($1.00 par value Authorized: 20,000,000 shares) $3.882 $3.882 Treasury Shares (1.952) (1.952) Retained Earnings 67,166 65,739 Total Shareholders' Equity $67,168 $65,741 Total Liabilities and Shareholders' Equity $227,788 $212,219 $19,211 $18,802 Memo To: All Senior Staff From: Kristen Huffman, CEO & President Re: New Strategic Direction Thank you for attending our annual strategic planning session. Given recent changes in the economy and customer needs, a new direction for our company is necessary. After reviewing how other companies restructured themselves in recent years, we will mirror how UPS® conducts business as a partner/consultant with large customers. For our company, however, we will go a step further and become a warehousing/local just-in-time (JIT) delivery source, instead of providing logistics advice to clients, as UPS® does. To accomplish this, we must integrate this new direction into our upcoming strategic plan and financial planning. First, I need all department managers to prepare their budgets. I would also like our accounting department to move ahead on a preliminary set of pro forma statements, even without final budgets, using the following assumptions. They must determine if external funding is needed. I have attached a summary of assumptions about this new direction. New Strategic Direction  Page 2 1. Assume inflation of 4% on expenses, not including depreciation and taxes. This is in addition to the new initiative’s costs. New Strategic Initiative Assumptions Huffman may overcome increased competition and economic slowdown by initiating a new strategy; this will turn our company into a one-stop shop and key logistics company. We will provide consulting services, generate revenues, and become a JIT warehouse/delivery source. A local retailer selling products .

1. Please do not use the answer below; it has already been used.
Please format it like the example below. Please give brief
explanation of how you achieved calculations.
Huffman Trucking
Balance Sheet
(Unaudited)
December 31st
2006
2005
(In Thousands)
Assets
Current Assets
Cash & Cash Equivalents
$51,993
$38,893
Accounts Receivable
56,292
57,441
Prepaid Expenses & Supplies
3,443
3,343
Total Current Assets
$111,728
$99,677
Carrier Operating Property (at cost)

2. $73,024
$70,957
Less: Allowance for Depreciation
(57,536)
(55,477)
Net Carrier Operating Property
$15,488
$15,480
Assets of Discontinued Operations
16,192
18,891
Goodwill (net)
57,767
53,977
Other Assets
26,613
24,194
Total Assets
$227,788
$212,219
Liabilities and Shareholders' Equity
Current Liabilities
Accounts Payable
$47,124
$39,936
Salaries & Wages
29,753
27,048
Current Portion of Long-Term Debt
2,204
2,514
Freight & Casualty Claims Payable

3. 9,746
8,941
Total Current Liabilities
$88,827
$78,439
Long-Term Liabilities
Accrued Pension & Post-Retirement Health Care
$58,362
$52,721
Long-Term Debt
13,431
15,318
Total Long-Term Liabilities
$71,793
$68,039
Shareholders' Equity
Common Stock
($1.00 par value Authorized: 20,000,000 shares)
$3.882
$3.882
Treasury Shares
(1.952)
(1.952)
Retained Earnings
67,166
65,739
Total Shareholders' Equity
$67,168
$65,741
Total Liabilities and Shareholders' Equity
$227,788

4. $212,219
$19,211
$18,802
Memo To: All Senior Staff From: Kristen Huffman, CEO &
President Re: New Strategic Direction Thank you for attending
our annual strategic planning session. Given recent changes in
the economy and customer needs, a new direction for our
company is necessary. After reviewing how other companies
restructured themselves in recent years, we will mirror how
UPS® conducts business as a partner/consultant with large
customers. For our company, however, we will go a step further
and become a warehousing/local just-in-time (JIT) delivery
source, instead of providing logistics advice to clients, as UPS®
does. To accomplish this, we must integrate this new direction
into our upcoming strategic plan and financial planning. First, I
need all department managers to prepare their budgets. I would
also like our accounting department to move ahead on a
preliminary set of pro forma statements, even without final
budgets, using the following assumptions. They must determine
if external funding is needed. I have attached a summary of
assumptions about this new direction. New Strategic Direction
4% on expenses, not including
depreciation and taxes. This is in addition to the new
initiative’s costs. New Strategic Initiative Assumptions
Huffman may overcome increased competition and economic
slowdown by initiating a new strategy; this will turn our
company into a one-stop shop and key logistics company. We
will provide consulting services, generate revenues, and become
a JIT warehouse/delivery source. A local retailer selling
products from a distant manufacturing plant, for example, may
accept JIT deliveries, instead of 40-foot trailer loads. This

5. would be fulfilled by the local operation. 2. Assume the
following regarding variables versus fixed-nature-of-income-
statement operating expenses for the existing business: a. 80%
of wage benefits is variable and 20% is fixed. b. 100% of fuel
expenses, purchased transportation, and operating supplies is
variable. c. 100% of operating taxes is fixed. d. 20% of
insurance and claims is fixed; the balance is variable. e. Assume
depreciation, even with new expenditures, is fixed as the
retirement of written-off assets, equaling new equipment. 3.
There will be new spending areas reflected on future budgets to
reflect added satellite warehouse costs and space rental and
costs of running the locations. a. In the first year, add $10
million of inflation, space rental, and operating costs at 25% of
revenues from the new initiative. b. In the second year, add $10
million space rental, with inflation at the same variable
percentage of sales. c. In the third year, add $7.5 million of the
variable percentage of sales. 4. In marketing, budget accounts
have been added for new incurred costs. We will continue our
present promotion and launch a new program, with the
assistance of our marketing partner, the ABC Marketing
Agency. They will advise us on the type, frequency, and content
of new messages. Assume 100% of the existing budget is fixed
with respect to volume along with new expenses. We expect
incremental expenses, with $5 million of inflation in the first
three years. 5. Our existing sales force, comprised of four
national account managers, will call on clients such as Wal-
Mart®, Sears®, and Best Buy®. Existing expenses are assumed
to be 100% fixed in relation to revenue. To tap into specialized
markets, our strategy is aimed at adding four industry-specific
managers, each with a salary base of $50,000 and 2%
commission of generated revenues. 6. The human resources
budget will not change substantially aside from added hiring,
recruiting, training, and drug testing fees. Assume 10% of
expenses is fixed; the balance is variable with volume. New
liabilities are variable. Expect an addition of $10 million to

6. operating property, spent in the first year. Our payment to
vendors, suppliers, and taxes will be in thirty-day terms. We
expect all payments to be in sixty-day terms. 8. Assume revenue
growth from our existing business will grow at 8% versus 10%
in past years. Our new strategy, however, adds incremental
consulting revenues of $3.5, $4.5, and $6.5 million in the first,
second, and third years. New warehousing will add revenue of
$10, $30, and $40 million in the first, second, and third years.
All new revenue will be subject to commissions for industry-
specific managers.
Huffman Trucking
Balance Sheet
(Unaudited)
December 31st
2011 2010
(In Thousands)
Assets
Current Assets
Cash & Cash Equivalents $89,664 $58,003
Accounts Receivable 51,869 81,557

7. Prepaid Expenses & Supplies 6,267 5,529
Total Current Assets $147,800 $145,089
Carrier Operating Property (at cost) $85,306 $81,461
Less: Allowance for Depreciation (69,536) (67,119)
Net Carrier Operating Property $15,770 $14,342
Assets of Discontinued Operations 7,516 8,739
Goodwill (net) 49,852 49,852
Other Assets 46,327 37,306
Total Assets $267,265 $255,328
Liabilities and Shareholders' Equity
Current Liabilities
Accounts Payable $40,843 $45,381
Salaries & Wages 37,299 33,014
Current Portion of Long-Term Debt 1,752 1,343

8. Freight & Casualty Claims Payable 10,389 9,697
Total Current Liabilities $90,283 $89,435
Accrued Pension & Post-Retirement Health Care $64,058
$58,672
Long-Term Debt 7,307 6,562
Total Long-Term Liabilities $71,365 $65,234
Common Stock ($1.00 par value Authorized: 20,000,000
shares)
Treasury Shares (1.952) (1.952)
Retained Earnings 105,615 100,657
Total Shareholders' Equity $105,617 $100,659
Long-Term Liabilities
Shareholders' Equity
$3.882 $3.882
Total Liabilities and Shareholders' Equity $267,265 $255,328
Historic Balance Sheet Data (Excel 2003 Version)

9. Huffman Trucking
Statement of Income
(Unaudited)
December 31st
2011 2010
(In Thousands)
Revenue $1,109,295 $969,240
Operating Expenses
Salaries, Wages & Benefits $406,191 $367,993
Fuel Expense 318,737 258,904
Operating Supplies and Expenses 117,670 105,875
Purchased Transportation 138,140 114,250
Operating Taxes & Licenses 19,033 17,753
Insurance & Claims 11,995 12,493
Provision for Depreciation 3,009 2,773

10. Total Operating Expenses $1,014,775 $880,041
Operating Income form Continuing Operations $94,520 $89,199
Interest Expense $466 $768
Tax Expense 34,887 32,923
Net Income $59,167 $55,508
Historic Income Statement Data (Excel 2003 Version)
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2003 Wages and Benefits Analysis - Drivers
Avg. Weekly
Wage
Avg. Annual
Wage
# of
Drivers
Annual Cost for

11. Drivers (000s)
% of Annual
Wages
% of Sales
($620,000,000)
Over the Road Drivers Rate
Wages (per mile
driven)
Paid Vacation (based
on seniority)
Paid Holidays $ 1,058 $ 2,115 $ 7,192 3.8% 1.2%
Paid Sick Days $ 1,058 $ 1,058 $ 3,596 1.9% 0.6%
Health & Welfare
Contributions
Pension Fund
Contributions
FICA Match $ 3,738 $ 12,709 6.8% 2.0%
Medicare Match $ 874 $ 2,972 1.6% 0.5%

12. FUTA Contributions $ 434 $ 1,476 0.8% 0.2%
SUTA Contributions $ 585 $ 1,989 1.1% 0.3%
Workers'
Compensation
Average annual cost $ 83,953 $ 297,841 59.3% 48.0%
Avg. Miles
Driven Per Year
$0.50 110,000 $ 1,058 $ 55,000 3,400 $187,000 30.2%
$ 1,058 $ 2,115 $ 7,192 3.8% 1.2%
$ 9,194 $ 31,258 16.7% 5.0%
$ 8,840 $ 30,056 16.1% 4.8%
$ 12,400 6.6% 2.0%
Total Payroll Less Drivers Remaining Salaries # of remaining
Avg. per employee
(000s) (000s) (000s) employees
$ 386,896 $ 297,841 $ 89,055 1,800 $ 49,475