1Exercise 8-4
The ledger of Wainwright Company at the end of the current year shows Accounts Receivable $76,000; Credit Sales $801,000; and Sales Returns and Allowances $50,000.
(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 $990 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 $850 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
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
$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
CURRE.
1Exercise 8-4The ledger of Wainwright Company at the end of the cu.docx
1. 1Exercise 8-4
The ledger of Wainwright Company at the end of the current
year shows Accounts Receivable $76,000; Credit Sales
$801,000; and Sales Returns and Allowances $50,000.
(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
$990 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
$850 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
Broadening Your Perspective 8-1
The financial statements of
Tootsie Roll
2. 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
12. 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,
13. 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
25. 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
Retained earnings, per accompanying statement
114,269
26. 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
667,408
27. 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
CASH FLOWS FROM OPERATING ACTIVITIES:
37. 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
(51,157
)
(16,808
38. )
(16,364
)
CASH FLOWS FROM FINANCING ACTIVITIES:
Shares repurchased and retired
(18,190
)
(22,881
)
(20,723
)
39. 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
(37,364
)
24,986
40. 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
Supplemental cash flow information
42. Stock dividend issued
$47,053
$46,683
$32,538
(The accompanying notes are an integral part of these
statements.)
Five Year Summary of Earning and Financial Hightlights
TOOTISE ROLL. INDUSTRY, INC. AND SUBSIDIARIES
(Thousands of dollars except per share, percentage and ratio
figures)
2011
2010
2009
56. 640,204
Average shares outstanding
57,892
58,685
59,425
60,152
61,580
Notes to Consolidated Financial Statements ($ 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
57. 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
2009
Net product sales:
United states
59. $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, e.g. 15.2.)
Accounts receivable turnover
2
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)
60. 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
70. 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:
71. 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
81. 47,865
Postretirement health care and life insurance benefits
26,108
20,689
Industrial development bonds
7,500
7,500
Liability for uncertain tax positions
8,345
9,835
82. Deferred compensation and other liabilities
48,092
46,157
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
83. 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
Retained earnings, per accompanying statement
114,269
135,866
84. 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
667,408
Total liabilities and shareholders’ equity
$857,856
$857,959
85. TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
Cash Flows (in thousands)
For the year ended December 31,
2011
2010
2009
CASH FLOWS FROM OPERATING ACTIVITIES:
91. Accounts payable and accrued liabilities
84
2,180
(2,755
)
Income taxes payable and deferred
(5,772
)
2,322
(12,543
)
Postretirement health care and life insurance benefits
95. (11,331
)
Sale and maturity of available for sale securities
7,680
8,208
17,511
Net cash used in investing activities
(51,157
)
(16,808
)
(16,364
)
96. CASH FLOWS FROM FINANCING ACTIVITIES:
Shares repurchased and retired
(18,190
)
(22,881
)
(20,723
)
Dividends paid in cash
(18,407
)
(18,130
97. )
(17,825
)
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
100. $47,053
$46,683
$32,538
(The accompanying notes are an integral part of these
statements.)
Five Year Summary of Earning and Financial Hightlights
TOOTISE ROLL. INDUSTRY, INC. AND SUBSIDIARIES
(Thousands of dollars except per share, percentage and ratio
figures)
2011
2010
2009
2008
2007
Sales and Earnings Data
114. 57,892
58,685
59,425
60,152
61,580
Notes to Consolidated Financial Statements ($ 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:
115. 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
2009
Net product sales:
United states
$487,185
$471,714
$455,517
118. Broadening Your Perspective 8-2
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
Net Sales
$6,080,788
$5,671,009
119. $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
1,208,672
Business realignment and impairment (credits) charges, net
120. (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
92,183
96,434
90,459
121. 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
Net Income Per Share—Basic—Class B Common Stock
$2.58
122. $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
$2.21
$1.90
123. Cash Dividends Paid Per Share:
Common Stock
$1.3800
$1.2800
$1.1900
Class B Common Stock
1.2500
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.
125. Cash and cash equivalents
$693,686
$884,642
Accounts receivable—trade
399,499
390,061
Inventories
648,953
533,622
Deferred income taxes
136,861
55,760
126. 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
516,745
524,134
131. 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
299,195,325 in 2010
299,269
299,195
132. 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
Treasury—Common Stock shares, at cost: 134,695,826 in
2011 and 132,871,512 in 2010
(4,258,962
)
133. (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
Total stockholders’ equity
872,648
134. 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
135. Cash Flows Provided from (Used by) Operating Activities
Net income
$628,962
$509,799
$435,994
Adjustments to reconcile net income to net cash provided from
operations:
138. 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
acquisitions and divestitures:
142. 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
)
—
(15,220
143. )
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
10,834
1,156
147. 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
37,103
148. 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
252,230
149. 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
159. 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
160. 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
171. 9,835
Deferred compensation and other liabilities
48,092
46,157
Total noncurrent liabilities
133,566
132,046
SHAREHOLDERS’ EQUITY:
172. 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
Retained earnings, per accompanying statement
114,269
173. 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
667,408
174. 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
CASH FLOWS FROM OPERATING ACTIVITIES:
185. (16,364
)
CASH FLOWS FROM FINANCING ACTIVITIES:
Shares repurchased and retired
(18,190
)
(22,881
)
(20,723
)
186. 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
(37,364
)
24,986
187. 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
Supplemental cash flow information
189. 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.
Tootsie Roll
Hershey Company
Accounts receivable turnover
192. Chat
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Broadening Your Perspective 6-2
The financial statements of
The Hershey Company
and
Tootsie Roll
…
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Broadening Your Perspective
Broadening Your Perspective 11-2
The financial statements of
The Hershey Company
194. and
Tootsie Roll
are presented below.
THE HERSHEY COMPANY
CONSOLIDATED STATEMENTS OF INCOME
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Question 5
The financial statements of
The Hershey Company
and
Tootsie Roll
are presented below.
THE HERSHEY COMPANY
CONSOLIDATED STATEMENTS OF INCOME
For the years …
8 years ago
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accounting exercises.
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195. NOT RATED
Please find the accounting homework attached. There are four
accounting exercises.
7 years ago
Accounting 1
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1Exercise 8-4
The ledger of Wainwright Company at the end of the current
year shows Accounts Receivable $76,000; Credit Sales
$801,000; and Sales Returns and Allowances $50,000.
(Credit account …
7 years ago
In its first month of operation, Kuhlman Company purchased
350 units of inventory for $4, then 450 units for $5, and finally
390 units for $6. At the end of the month, 420 units remained.
Compute the amount of phantom profit that would result if the
compa
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In its first month of operation, Kuhlman Company
purchased350units of inventory for $4, then450units for $5, and
finally390units for $6. At the end of the …
7 years ago
See below...
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Broadening Your Perspective 8-1
196. The financial statements of Tootsie Roll are presented below.
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
Earnings, Comprehensive …
7 years ago
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