Question 4 The stockholders’ equity section of Tootsie Roll Industries’ balance sheet is shown in the Consolidated Statement of Financial Position.  (Note that Tootsie Roll has two classes of common stock. To answer the following questions, add the two classes of stock together.) 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 $35,198 $54,246 $56,002 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 ) Stock dividends (47,175 ) (46,806 ) (32,629 ) Retained earnings at end of year $114,269 $135,866 $147,687 Earnings per share $0.76 $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 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 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: 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 578 689 Total current assets 212,201 235,167 PROPERTY, PLANT AND EQUIPMENT, at cost: Land 21,939 21,696 Buildings 107,567 102,934 Machinery and equipment 322,993 307,178 Construction in progress 2,598 9,243 455,097 440,974 Less—Accumulated depreciation 242,935 225,482 Net property, plant and equipment .

1. Question 4
The stockholders’ equity section of Tootsie Roll Industries’
balance sheet is shown in the Consolidated Statement of
Financial Position.
(Note that Tootsie Roll has two classes of common stock. To
answer the following questions, add the two classes of stock
together.)
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

2. 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

3. 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

4. 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

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

6. 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

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

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

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

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

11. 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

12. December 31,
2011
2010
CURRENT ASSETS:
Cash and cash equivalents
$78,612
$115,976
Investments
10,895

13. 7,996
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

14. 42,676
35,416
Raw materials and supplies
29,084
21,236
Prepaid expenses
5,070
6,499
Deferred income taxes
578
689

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

16. 102,934
Machinery and equipment
322,993
307,178
Construction in progress
2,598
9,243
455,097
440,974

17. Less—Accumulated depreciation
242,935
225,482
Net property, plant and equipment
212,162
215,492
OTHER ASSETS:
Goodwill
73,237
73,237

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

19. 6,680
Equity method investment
3,935
4,254
Deferred income taxes
7,715
9,203
Total other assets
433,493
407,300

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

21. $9,791
Dividends payable
4,603
4,529
Accrued liabilities
43,069
44,185
Total current liabilities
58,355
58,505

22. NONCURRENT LIABILITES:
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

23. 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:

24. 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

25. 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

26. 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

27. 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:

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

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

30. 1,267
522
320
Changes in operating assets and liabilities:
Accounts receivable
(5,448
)
717

31. (5,899
)
Other receivables
3,963
(2,373
)
(2,088
)
Inventories
(15,631
)
(1,447
)
455

32. 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
)

33. 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

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

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

36. 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

37. (51,157
)
(16,808
)
(16,364
)
CASH FLOWS FROM FINANCING ACTIVITIES:
Shares repurchased and retired
(18,190
)
(22,881
)
(20,723

38. )
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

39. (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

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

41. $49
$182
Stock dividend issued
$47,053
$46,683
$32,538
(The accompanying notes are an integral part of these
statements.)
Answer the following questions.
Your answer is incorrect. Try again.
What is the par or stated value per share of Tootsie Roll’s
common stock?
(Round answer to 4 decimal places, e.g. 1.2531.)
Par or stated value per share
$
[removed]
Your answer is incorrect. Try again.

42. What percentage of Tootsie Roll’s authorized common stock
was issued at December 31, 2011?
(Round to 0 decimal places, e.g. 17%)
Percentage of common stock issued
[removed]
%
Your answer is incorrect. Try again.
How many shares of common stock were outstanding at
December 31, 2010, and at December 31, 2011?
(Enter the answers in thousands.)
2011
2010
Number of shares outstanding
[removed]
[removed]
Your answer is partially correct. Try again.
Calculate the payout ratio, earnings per share, and return on
common stockholders’ equity for 2011.
(Round earnings per share to 2 decimal places, e.g. 15.12 and
all other answers to 1 decimal places, e.g. 12.5%.)
Payout ratio
[removed]
%
Earnings per share
$
.76

43. Return on common stockholders’ equity
[removed]
%
Question Attempts: 1 of 3 used