Rocky Mountaim

Rocky Mountain Chocolate Factory Inc.—

Preparing Financial Statements

EXCERPTED WITH PERMISSION FROM

CASES IN FINANCIAL REPORTING

SEVENTH EDITION

ISBN: 978-1-934319-79-6

ELLEN ENGEL

D. ERIC HIRST

MARY LEA MCANALLY

© Copyright 2012 by Cambridge Business Publishers, LLC. All rights reserved. No part of this

publication may be reproduced in any form for any purpose without the written permission of the

publisher.

This document is authorized for use by Zhengyuan Huang, from 8/24/2016 to 12/6/2016, in the course:

BUS 312A/612A: Financial Reporting I - Sevier (Fall 2016), Emory University.

Any unauthorized use or reproduction of this document is strictly prohibited.

Rocky Mountain Chocolate Factory Inc.—

Preparing Financial Statements

Rocky Mountain Chocolate Factory, Inc., incorporated in 1982, is an international franchiser, confectionery

manufacturer and retail operator in the United States, Canada and the United Arab Emirates. The Company

manufactures an extensive line of premium chocolate candies and other confectionery products. The Company's

revenues are derived from three principal sources: sales to franchisees and others of chocolates and other

confectionery products manufactured by the Company; the collection of initial franchise fees and royalties from

franchisees' sales; and sales at Company-owned stores of chocolates and other confectionery products. (Source:

company Web site.)

Learning Objectives

• Understand how economic events are recorded in the financial statements.

• Appreciate the linkages between the balance sheet and the income statement.

• Be able to record transactions and adjustments in journal entry form.

• Prepare a simple set of financial statements.

• Distinguish between cash and accrual-basis accounting.

To complete this case you need to develop a simple spreadsheet. The structure of the spreadsheet follows

after the case questions.

The spreadsheet does not use debits and credits, per se....