Contained the following information for Seaboard Corporation (dollars in thousands): 1997 1996 1995 Earnings before cumulative effect of accounting change $30,574 $2,840 $20,202 Cumulative effect of changing the accounting for inventories, net of tax expense of $1,922 — 3,006 — Net earnings $30,574 $5,846 $20,202 The following figures are on a per share basis: 1997 1996 1995 Earnings before cumulative effect of accounting change $ […]

The Sisters Coffee Emporium has been researching and developing new exotic coffee flavors and innovative coffee equipment. During 1998, it spent over $250,000 on R&D costs. It is now year-end and the company is preparing its balance sheet. Sisters would like the most relevant information to be reported to investors because the company is considering whether or not to capitalize the R&D costs. a. Advise […]

Comprehensive Income IDQ’s income statement data for the year ended November 30, 1999, is presented below (dollars in millions). 11/30/99 Net sales $340 Cost of goods sold 249 Gross profit 91 Selling, general, and administrative 40 Income before depreciation 51 Nonoperating income 2 Income before tax 53 Provisions for income tax 20 Net income $ 33 Dividends 12 Unrealized gain on securities 10 Foreign exchange […]

Comprehensive Income Trends IDQ’s income statement data for the years ended November 30, 2000 and 2001 are presented below (dollars in millions). 11/30/00 11/30/01 Net sales $1061 $1154 Cost of goods sold 792 830 Gross profit 269 324 Selling, general, and administrative 111 134 Income before depreciation 158 190 Nonoperating income 5 6 Income before tax 163 196 Provisions for income tax 64 76 Net […]

Accounting Principle Change Mesple Music, Inc. purchased musical instrument equipment on January 1, 1999, for $25,000. Mesple depreciated it on the straight-line basis over five years with no salvage value. However, on January 1, 2001, the company realized that the productive capacity of this equipment is declining, so it decided to change to the double-declining balance method of depreciation. Required a. Calculate depreciation expense for […]

Ratios: Accounting Change Polymer Element Corporation presented the following (partial) income statements (dollars in thousands, except EPS): December 31 2000 1999 1997 Income from continuing operations after tax $ 207,500 $ 195,400 $ 189,600 Cumulative effect of change in accounting principle (25,000) 0 (45,000) Net income $ 182,500 $ 195,400 $ 144,600 Weighted-average common shares outstanding 146,000 146,000 146,000 Average total shareholders’ equity $3,650,000 $3,908,000 […]

Calculating Depreciation A firm has a computer that originally cost $37,500 with an estimated salvage value of $17,500 and an estimated life of five years. During the first two years, the firm used straight-line (SL) depreciation. In the third year, the sum-of-the years’ digits (SYD) method was adopted. Required a. Calculate the depreciation expense during the first two years under each method. b. What would […]

Natalie”s friend, Curtis Lesperance, decides to meet with Natalie after hearing that her discussions about a possible business partnership with her friend Katy Peterson have failed. Because Natalie has been so successful with Cookie Creations and Curtis has been just as successful with his coffee shop, they both conclude that they could benefit from each other”s business expertise. Curtis and Natalie next evaluate the different […]

Calculating Depreciation A firm has a delivery truck that originally cost $55,000 with an estimated salvage value of $5,000 and an estimated life of 10 years. During the first two years, the firm used sum-of-the-years’ digits (SYD) depreciation. At the beginning of the third year, straight-line (SL) depreciation was adopted. Required a. Calculate the depreciation expense during the first two years under each method. b. […]

PepsiCo, Inc.”s financial statements are presented. Financial statements ofThe Coca-Cola Companyare presented. Instructions for accessing and using the complete annual reports of PepsiCo and Coca-Cola, including the notes to the financial statements, are also provided in Appendices B and C, respectively. Instructions (a)What is the par or stated value of Coca-Cola”s and PepsiCo”s common stock? (b)What percentage of authorized shares was issued by Coca-Cola at […]