FIN 360 BUSINESS DESCRIPTION Please include a pie chart depicting the sizes of the various business Resources: Company annual report Company 10-K filing Company Investor Relations website FIN 360 COMPETITIVE POSITION What is the company’s respective industry market share of each line of business? Is its market share growing or contracting and why? RESOURCES .. Barron’s, Bloomberg, Business Source Complete, CNBC, Google Finance, IBES World, Morningstar Direct, Mutual Fund Management Commentary on Holdings, S&P NetAdvantage, Statista, ValueLine, Wall Street Journal, Zacks, Yahoo Finance FIN 360 INVESTMENT POSTIVES Bullet point rationales… what are the positive attributes of your stock recommendation back it up by facts Examples… new product introduction, niche market with growing market share, cost cutting initiative will grow operating margins RESOURCES .. Barron’s, Bloomberg, Business Source Complete, CNBC, Google Finance, IBES World, Morningstar Direct, Mutual Fund Management Commentary on Holdings, S&P NetAdvantage, Statista, ValueLine, Wall Street Journal, Zacks, Yahoo Finance EXERCISE 9-8A a. Event Assets = Liab. + Equity Rev. Exp. = Net Inc. Cash Flow 1. 2. 3a. 3b. 4. 5. 6. 7. 8. 9. 10. EXERCISE 9-8A (cont.) b. Ozark Sales General Journal for 2016 Event Account Title Debit Credit 1. Cash Common Stock 2. Merchandise Inventory Accounts Payable 3a. Cash Sales Revenue Sales Tax Payable 3b. Cost of Goods Sold Merchandise Inventory 4. Warranty Expense Warranties Payable 5. Sales Tax Payable Cash 6. Cash Notes Payable 7. Warranty Payable Cash 8. Operating Expense Cash 9. Accounts Payable Cash 10. Interest Expense1 Interest Payable EXERCISE 9-8A b. (cont.) Ozark Sales T-Accounts for 2016 Assets = Liabilities + Stockholder’s Equity Cash Accounts Payable Common Stock 1. 5. 9. 2. 1. 3a. 7. Bal. Bal. 6. 8. 9. Sales Tax Payable Sales Revenue Bal. 284,600 5. 3a. 3a. 510,000 Bal. Bal. 510,000 Merchandise Inventory 2. 3b. Warranties Payable Cost of Goods Sold Bal. 7. 4. 3b. Bal. 4,000 Bal. 330,000 Interest Payable Operating Expenses 10. 8. Bal. 667 Bal. 78,000 Notes Payable Warranty Expense 6. 4. Bal. 50,000 Bal. 10,200 Interest Expense 10. Bal. 667 EXERCISE 9-8A (cont.) c. Ozark Sales Income Statement For the Year Ended December 31, 2016 Sales Revenue Cost of Goods Sold Gross Margin Expenses Operating Expenses $78,000 Warranty Expense 10,200 Total Operating Expenses Operating Income Interest Expense Net Income ...

1. FIN 360
BUSINESS DESCRIPTION
Please include a pie chart depicting the sizes of the various
business
Resources:
Company annual report
Company 10-K filing
Company Investor Relations website
FIN 360
COMPETITIVE POSITION
What is the company’s respective industry market share of each
line of business?
Is its market share growing or contracting and why?
RESOURCES .. Barron’s, Bloomberg, Business Source
Complete, CNBC, Google Finance, IBES World, Morningstar
Direct, Mutual Fund Management Commentary on Holdings,
S&P NetAdvantage, Statista, ValueLine, Wall Street Journal,
Zacks, Yahoo Finance
FIN 360
INVESTMENT POSTIVES
Bullet point rationales… what are the positive attributes of your
stock recommendation back it up by facts
Examples… new product introduction, niche market with
growing market share, cost cutting initiative will grow
operating margins

2. RESOURCES .. Barron’s, Bloomberg, Business Source
Complete, CNBC, Google Finance, IBES World, Morningstar
Direct, Mutual Fund Management Commentary on Holdings,
S&P NetAdvantage, Statista, ValueLine, Wall Street Journal,
Zacks, Yahoo Finance
EXERCISE 9-8A
a.
Event
Assets
=
Liab.
+
Equity
Rev.
Exp.
=
Net Inc.
Cash Flow

3. 1.
2.
3a.

4. 3b.
4.

5. 5.
6.
7.

6. 8.
9.
10.

7. EXERCISE 9-8A (cont.)
b.
Ozark Sales
General Journal for 2016

8. Event
Account Title
Debit
Credit
1.
Cash
Common Stock
2.
Merchandise Inventory
Accounts Payable
3a.
Cash

9. Sales Revenue
Sales Tax Payable
3b.
Cost of Goods Sold
Merchandise Inventory
4.
Warranty Expense
Warranties Payable

10. 5.
Sales Tax Payable
Cash
6.
Cash
Notes Payable
7.
Warranty Payable
Cash

11. 8.
Operating Expense
Cash
9.
Accounts Payable
Cash
10.
Interest Expense1
Interest Payable
EXERCISE 9-8A b. (cont.)

12. Ozark Sales
T-Accounts for 2016
Assets
=
Liabilities
+
Stockholder’s Equity
Cash
Accounts Payable
Common Stock
1.
5.
9.
2.
1.
3a.
7.
Bal.

13. Bal.
6.
8.
9.
Sales Tax Payable
Sales Revenue
Bal. 284,600
5.
3a.
3a. 510,000
Bal.
Bal. 510,000
Merchandise Inventory

14. 2.
3b.
Warranties Payable
Cost of Goods Sold
Bal.
7.
4.
3b.
Bal. 4,000
Bal. 330,000

15. Interest Payable
Operating Expenses
10.
8.
Bal. 667
Bal. 78,000
Notes Payable
Warranty Expense

16. 6.
4.
Bal. 50,000
Bal. 10,200
Interest Expense
10.

17. Bal. 667
EXERCISE 9-8A (cont.)
c.
Ozark Sales
Income Statement
For the Year Ended December 31, 2016
Sales Revenue
Cost of Goods Sold

18. Gross Margin
Expenses
Operating Expenses
$78,000
Warranty Expense
10,200
Total Operating Expenses

19. Operating Income
Interest Expense
Net Income
EXERCISE 9-8A c. (cont.)
Ozark Sales
Balance Sheet

20. As of December 31, 2016
Assets
Cash
Merchandise Inventory
Total Assets
Liabilities

21. Accounts Payable
Sales Tax Payable
Warranties Payable
Interest Payable
Notes Payable
Total Liabilities

22. Stockholders’ Equity
Common Stock
Retained Earnings
Total Stockholders’ Equity
141,133
Total Liabilities and Stockholders’ Equity
$334,600
EXERCISE 9-8A c. (cont.)

23. Ozark Sales
Statement of Cash Flows
For the Year Ended December 31, 2016
Cash Flows From Operating Activities:
Inflow from Customers
Inflow from Sales Tax
Outflow to Purchase Inventory
Outflow for Expenses1
Outflow for Sales Tax

24. Net Cash Flow from Operating Activities
Cash Flows From Investing Activities
-0-
Cash Flows From Financing Activities:
Inflow from Stock Issue
Inflow from Loan

25. Net Cash Flow from Financing Activities
Net Change in Cash
Plus: Beginning Cash Balance
Ending Cash Balance
d. Current Liabilities:
Accounts Payable $

26. Sales Tax Payable
Warranty Payable
Interest Payable
Notes Payable
Total Current Liabilities $
EXERCISE 9-10A
a.
Clay - March
Gross Earnings
Deductions:
Federal Income Tax ($3,600 x %)
FICA Tax - SS ($3,600 x %)
FICA Tax - Medicare ($3,600 x %)
Total Deductions
Net Pay

27. Philip – March
Gross Earnings
Deductions:
Federal Income Tax ($x %)
FICA Tax - SS ($x %)
FICA Tax - Medicare ($ x %)
Total Deductions
Net Pay
EXERCISE 9-10A
b.
Clay - December
Gross Earnings

28. Deductions:
Federal Income Tax
FICA Tax - SS
FICA Tax - Medicare
Total Deductions
Net Pay
Philip – December
Gross Earnings
Deductions:
Federal Income Tax
FICA Tax - Medicare

29. Total Deductions
Net Pay
c.
d.
Amount appearing on W-2 for 2016
Clay
Box 1 Wages, tips, and other compensation
Box 2 Federal income tax withheld
Box 3 Social Security wages
Box 4 Social Security tax withheld
Box 5 Medicare wages and tips
Box 6 Medicare tax withheld

30. EXERCISE 9-10A d. (cont.)
Amount appearing on W-2 for 2017
Philip
Box 1 Wages, tips, and other compensation
Box 2 Federal income tax withheld
Box 3 Social Security wages
Box 4 Social Security tax withheld
Box 5 Medicare wages and tips
Box 6 Medicare tax withheld

31. EXERCISE 10-4A
a.
Effect of Transactions on Financial Statements

32. Balance Sheet
Income Statement
Statement of
No.
Assets
=
Liab.
+
S. Equity
Rev.
Exp.
=
Net Inc.
Cash Flow
1.

33. 2.
b. (1)

34. Revenue
Expenses
Operating Expenses
Interest Expense
Total Expenses

35. Net Income
$ 5,000
(2)
Cash Flows From Operating Activities:
Inflow from Customers
Outflow for Expenses
Net Cash Flow from Operating Activities
(3)
Cash Flows From Financing Activities:
Inflow from Issue of Note
Outflow to Repay Note
Net Cash Flow from Financing Activities

36. c.
EXERCISE 10-5A
Month
Amount Borrowed (Repaid)
Balance End of Month
Interest Rate
Interest Expense
January
.06/12
February
.065/12
March
.06/12

37. Date
Account Titles
Debit
Credit
2016
Jan. 1
Cash
Line of Credit Payable
Jan. 31
Interest Expense
Cash

38. Feb. 1
Cash
Line of Credit Payable
Feb. 28
Interest Expense
Cash
March 1
Line of Credit Payable
Cash

39. March 31
Interest Expense
Cash
EXERCISE 10-6A
a.
Doyle Company
General Journal
Date
Account Titles
Debit
Credit
2016

40. Jan. 1
Cash
Bonds Payable
Jan. 1
Land
Cash
Dec. 31
Cash
Lease Revenue

41. Dec. 31
Interest Expense ($500,000 x 7%)
Cash
Dec. 31
Lease Revenue
Interest Expense
Retained Earnings
2017
Dec. 31
Cash

42. Lease Revenue
Dec. 31
Interest Expense
Cash
Dec. 31
Lease Revenue
Interest Expense
Retained Earnings

43. EXERCISE 10-6A a. (cont.)
Doyle Company
Assets
=
Liabilities
+
Stockholders’ Equity
Cash
Bonds Payable
Retained Earnings
2016
2016
2016

44. 1/1
1/1
1/1
cl
12/31
12/31
Bal.
Bal.
Bal.
2017
2017
cl
12/31
12/31

45. Bal.
Bal. 180,000
Lease Revenue
2016
Land
cl
12/31
2016

46. Bal. -0-
1/1
2017
Bal.
cl
12/31
Bal. -0-

47. Interest Expense
2016
12/31
cl
Bal. -0-

48. 2017
12/31
cl
Bal. -0-
10-23
EXERCISE 10-6A b. (cont.)
Doyle Company

49. Financial Statements
2016
2017
Income Statements for the Year Ended Decebmer 31
Lease Revenue
Interest Expense

50. Net Income
$ 90,000
$ 90,000
Balance Sheets as of December 31
Assets
Cash

51. Land
Total Assets
Liabilities
Bonds Payable

52. Stockholders’ Equity
Common Stock
Retained Earnings
Total Stockholders’ Equity

53. Total Liab. and Stockholders’ Equity
$590,000
$680,000
Statements of Cash Flows for the Year Ended December 31
Cash Flows From Operating Activities:
Receipts from Revenue

54. Paid for Interest
Net Cash Flow from Operating Act.
Cash Flows From Investing Activities:
Paid to Purchase Land

55. Cash Flows From Financing Activities:
Proceeds from Bond Issue
Net Change in Cash

56. Plus: Beginning Cash Balance
Ending Cash Balance
EXERCISE 10-7A
Bell Corp.
General Journal
Date
Account Titles

57. Debit
Credit
2016
Jan.1
Cash
Bonds Payable
Dec. 31
Interest Expense*
Cash
2017

58. Dec. 31
Interest Expense
Cash
EXERCISE 10-8A
Nivan Co.
Date
Account Titles
Debit
Credit
2016
Jan. 1

59. Cash
Bonds Payable
2020
Dec. 31
Loss on Bond Redemption
Bonds Payable
Cash

60. EXERCISE 10-19A
a.
Face Value
−
Bond Price
=
Discount
b.
Carrying Value
x
Effective Rate
=
Interest Expense
c. Compute the Ending Balance in the Discount Account
Face Value
x
Stated Rate
=
Cash Payment

61. Interest Expense
−
Cash Payment
=
Amortization
Beginning Discount
−
Amortization
=
Ending Discount
Bond Carrying Value as of December 31, 2016
Bond Payable (Face Value)
Discount on Bonds Payable
Carrying Value
d.
Account Titles
Debit
Credit

62. Interest Expense
Bond Discount
Cash
EXERCISE 10-20A
a.
Date
Cash
Payment
Interest
Expense
Discount
Amortization
Carrying Value
January 1, 2016
76,888
December 31, 2016
December 31, 2017

63. December 31, 2018
December 31, 2019
December 31, 2020
Totals
32,000
35,112
3,112
b.
Bond liability
$
Less: Bond discount
Carrying value
$
c.

64. d.
EXERCISE 10-25A
a.
Current Total Current Total
Situation Assets Assets LiabilitiesLiabilities
Currently
Using bonds
Using stock
If Bonds If Stock
CurrentlyAre IssuedIs Issued
Current ratio
Debt to assets ratio
(1)
(2)
(3)
(4)
(5)
b. Bonds Stock
EBIT
Interest expense
Pretax earnings
Tax expense (40%) (21,600) (24,000)
Net earnings
Dividends
Additional retained earnings $ $