Chapter 13

Continuing Cookie Chronicle

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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, 2012 for the years 2012 and 2011, and the income statements for the years ended October 31, 2011 and 2012, are presented below. COOKIE & COFFEE CREATIONS INC. Balance Sheet October 31 2012 $ 25,324 3,250 7,897 5,800 99,000 (25,200) $116,071

Assets

2011 $ 5,550 2,710 7,450 6,050 75,500 (9,100) $88,160

Cash Accounts receivable Inventory Prepaid expenses Equipment Accumulated depreciation Total assets Liabilities and Stockholders’ Equity Accounts payable Income taxes payable Dividends payable Salaries payable Interest payable Note payable—current portion Note payable—long-term portion Preferred stock, no par, $6 cumulative— 3,000 and 2,800 shares issued, respectively Common stock, $1 par—24,180 shares issued Additional paid in capital—treasury stock Retained earnings Total liabilities and stockholders’ equity

$

1,150 10,251 28,000 2,250 188 4,000 6,000

$ 2,450 9,200 25,000 1,280 0 0 0

15,000 24,180 250 24,802 $116,071

14,000 24,180 250 11,800 $88,160

COOKIE & COFFEE CREATIONS INC. Income Statement Year Ended October 31 2012 Sales Cost of goods sold Gross profit Operating expenses Salaries and wages expense Depreciation expense Other operating expenses Total operating expenses Income from operations Other expenses Interest expense Loss on sale of computer equipment Total other expenses Income before income tax Income tax expense Net income $485,625 222,694 262,931 147,979 17,850 43,186 209,015 53,916 413 2,250 2,663 51,253 12,813 $ 38,440

2011 $462,500 208,125 254,375 146,350 9,100 42,925 198,375 56,000 0 0 0 56,000 14,000 $ 42,000

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chapter 13 Financial Analysis: The Big Picture

Additional information: Natalie and Curtis are thinking about borrowing an additional $20,000 to buy more kitchen...