Ccc13 | Computer Science homework help

Continuing Cookie Chronicle 1

Continuing Cookie Chronicle

(Note: This is a continuation of the Cookie Chronicle from Chapters 1 through 12.)

CCC13 The comparative balance sheet of Cookie & Coffee Creations Inc. at October 31, 2018 for the years 2018 and 2017, and the income statements for the years ended October 31, 2017 and 2018, are presented below.

COOKIE & COFFEE CREATIONS INC.

Balance Sheet

October 31

 

Assets

 

2018

 

2017

Cash

 

$  22,324

 

$  5,550

Accounts receivable

 

3,250

 

2,710

Inventory

 

7,897

 

7,450

Prepaid expenses

 

5,800

 

6,050

Equipment

 

102,000

 

75,500

Accumulated depreciation

 

  (25,200)

 

  (9,100)

Total assets

 

$116,071

 

$88,160

Liabilities and Stockholders’ Equity

 

 

 

Accounts payable

$    1,150

 

$  2,450

Income taxes payable

9,251

 

7,200

Dividends payable

27,000

 

27,000

Salaries and wages payable

7,250

 

1,280

Interest payable

188

 

0

Note payable—current portion

4,000

 

0

Note payable—long-term portion

6,000

 

0

Preferred stock, no par, $6 cumulative—

 

 

 

   3,000 and 2,800 shares issued,

 

 

 

   respectively

15,000

 

14,000

Common stock, $1 par—25,180

   shares issued

25,180

 

25,180

Additional paid in capital—treasury stock

250

 

250

Retained earnings

   20,802

 

  10,800

Total liabilities and stockholders’ equity

$116,071

 

$88,160

COOKIE & COFFEE CREATIONS INC.

Income Statement

Year Ended October 31

 

2018

 

2017

Sales

$485,625

 

$462,500

Cost of goods sold

   222,694

 

   208,125

Gross profit

   262,931

 

  254,375

Operating expenses

   Salaries and wages expense

 

147,979

 

 

146,350

   Depreciation expense

17,600

 

9,100

   Other operating expenses

48,186

 

42,925

     Total operating expenses

  213,765

 

  198,375

Income from operations

    49,166

 

    56,000

Other expenses

   Interest expense

 

413

 

 

0

   Loss on disposal of plant assets

2,500

 

0

     Total other expenses

2,913

 

0

Income before income tax

46,253

 

56,000

Income tax expense

     9,251

 

    14,000

Net income

$  37,002

 

$  42,000

Additional information:

Natalie and Curtis are thinking about borrowing an additional $20,000 to buy more kitchen equipment. The loan would be repaid over a 4-year period. The terms of the loan provide for equal semi-annual payments of $2,500 on May 1 and November 1 of each year, plus interest of 5% on the outstanding balance.

Instructions

(a)  Calculate the following ratios for 2017 and 2018.

1.    Current ratio

2.    Debt to total assets

3.    Gross profit rate

4.    Profit margin

5.    Return on assets (Total assets at November 1, 2016, were $33,180.)

6.    Return on common stockholders’ equity (Total common stockholders’ equity at November 1, 2016, was $23,180. Dividends on preferred stock were $16,800 in 2017 and $18,000 in 2018).

(b)  Prepare a horizontal analysis of the income statement for Cookie & Coffee Creations Inc. using 2017 as a base year.

(c)  Prepare a vertical analysis of the income statement for Cookie & Coffee Creations Inc. for 2018 and 2017.

(d)  Comment on your findings from parts (a) to (c).

(e)  What impact would borrowing an additional $20,000 to buy more equipment have on each of the ratios in (a) above, assuming that no changes are expected on the income statement and balance sheet? Comment on your findings.

(f)   What would justify a decision by Cookie & Coffee Creations Inc. to buy the additional equipment? What alternatives are there instead of bank financing?

 

Premium Custom Essays
Calculate your paper price
Pages (550 words)
Approximate price: -

Why Work with Us

Top Quality and Well-Researched Papers

We always make sure that writers follow all your instructions precisely. You can choose your academic level: high school, college/university or professional, and we will assign a writer who has a respective degree.

Professional and Experienced Academic Writers

We have a team of professional writers with experience in academic and business writing. Many are native speakers and able to perform any task for which you need help.

Free Unlimited Revisions

If you think we missed something, send your order for a free revision. You have 10 days to submit the order for review after you have received the final document. You can do this yourself after logging into your personal account or by contacting our support.

Prompt Delivery and 100% Money-Back-Guarantee

All papers are always delivered on time. In case we need more time to master your paper, we may contact you regarding the deadline extension. In case you cannot provide us with more time, a 100% refund is guaranteed.

Original & Confidential

We use several writing tools checks to ensure that all documents you receive are free from plagiarism. Our editors carefully review all quotations in the text. We also promise maximum confidentiality in all of our services.

24/7 Customer Support

Our support agents are available 24 hours a day 7 days a week and committed to providing you with the best customer experience. Get in touch whenever you need any assistance.

Try it now!

Calculate the price of your order

Total price:
$0.00

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services

No need to work on your paper at night. Sleep tight, we will cover your back. We offer all kinds of writing services.

Essays

Essay Writing Service

No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.

Admissions

Admission Essays & Business Writing Help

An admission essay is an essay or other written statement by a candidate, often a potential student enrolling in a college, university, or graduate school. You can be rest assurred that through our service we will write the best admission essay for you.

Reviews

Editing Support

Our academic writers and editors make the necessary changes to your paper so that it is polished. We also format your document by correctly quoting the sources and creating reference lists in the formats APA, Harvard, MLA, Chicago / Turabian.

Reviews

Revision Support

If you think your paper could be improved, you can request a review. In this case, your paper will be checked by the writer or assigned to an editor. You can use this option as many times as you see fit. This is free because we want you to be completely satisfied with the service offered.