Base your answers to the following questions on the financial statements for Dollarama Inc. in Exhibits 1-9A to D.

In the questions below, the year 2014 refers to Dollarama€™s fiscal year that ends February 2, 2014, and the year 2013 refers to the prior fiscal year ending February 3, 2013.
Required:
a. Determine the amount of dividends that Dollarama declared in 2014. On which financial statement(s) did you find this information?
b. Find the following amounts in the statements:
i. Revenues from the sale of merchandise in 2014
ii. Cost of sales and general, administrative, and store operating expenses in 2014
iii. Net financing costs in 2014
iv. Income tax expense in 2014
v. Net earnings in 2013
vi. Merchandise inventories at the end of 2013
vii. Accounts payable and accrued liabilities at the beginning of the 2014 fiscal year
viii. Retained earnings at the end of 2014
ix. Long-term debt at the beginning of 2014 (include the current portion long-term debt)
x. Cash flows generated from operating activities in 2014
xi. Cash payments to purchase property, plant, and equipment in 2014
xii. Cash proceeds from the issuance of common shares in 2014
xiii. Cash flows generated from (used for) financing activities in 2013
xiv. Cash payments to reduce long-term debt in 2014
c. List the two largest sources of cash and the two largest uses of cash in 2014. (Consider operations to be a single source or use of cash.)
d. Suggest two reasons why net earnings were $250,094 thousand in 2014, yet cash flows generated from operations were $308,378 thousand.
e. During 2014, total sales revenue was approximately $205,858 thousand higher than in 2013. However, net earnings in 2014 were only $29,109 thousand higher than in 2013. Examine the consolidated statement of net earnings and comprehensive income and explain where the additional revenue went.

Transcribed Image Text:

EXHIBIT 1-9A DOLLARAMA INC.'S 2014 CONSOLIDATED STATEMENT OF FINANCIAL POSITION Dollarama Inc. Consolidated Statement of Financial Position as at Expressed in thousands of Canadian doll February 2, 2014 February 3, 2013 Note Current assets Cash and cash equivalents Accounts receivable Deposits and prepald expenses Merchandise inventories Derivative financial instruments 71,470 5,963 5,382 364,680 11,455 458.950 52,566 5,798 5,756 338,385 3,710 406.215 Non-current assets Property and equipment Intangible assets 250,612 129,436 727,782 1,566,780 197,494 122,201 727,782 1,453,692 Total assets Liabilities and shareholders' equity Current liabilities Accounts payable and accrued liabilities Dividend payable Income taxes payable Derivative financial instruments Current portion of finance lease obligations Current portion of long-term debt 128,857 9,823 22,102 101,286 8,099 23,636 185 604 1,022 3,017 164,821 133,810 DOLLARAMA INC.'S 2014 CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued) February 2 2014 February 3, 2013 Note Non-curent liabilities debt 395,446 1,484 51,592 89,271 702,614 262,071 Finance lease obligations Deferred rent and tenant inducements Deferred income taxes Total liabilities 45,327 80.994 522,202 Commitments Shareholders' equity Share capital Contributed surplus Retained earnings Accumulated other comprehensive income 13 493,602 10,884 346,478 13,202 517,308 8,157 403,268 2,761 Total shareholders' equity 864,166 931,490 Total liabilities and shareholders' equity 1,566,780 1,453,692 DOLLARAMA INC.'S 2014 CONSOLIDATED STATEMENT OF INCOME Dollarama Inc Consolidated Statement of Net Earnings and Comprehensive Income for the years ended (Expressed in thousands of Canadian dollars, except share and per share amounts) 52-week 53-weeks February 2, February 3, Note Sales Cost of sales Gross profit General, administrative and store operating expenses Depreciation and amortization Operating income Net financing costs Earnings before income taxes Provision for income taxes Net earnings for the year 2,064,676 1,299,092 765,584 363,182 47,898 354,504 11,673 342,831 92,737 250,094 1,858,818 1,163,979 694,839 339,662 39,284 315,893 10,839 305,054 84,069 220,985 Other comprehensive income Items to be reclassified subsequently to net earnings Unrealized gain on derivative financial instruments, net of reclassification adjustment Income taxes relating to component of other comprehensive income Total other comprehensive income, net of income taxes Total comprehensive income for the year (3,808) 10,441 260,535 785 221,770 DOLLARAMA INC.'S 2014 CONSOLIDATED STATEMENT OF CASH FLOWS Dollarama Inc Consolidated Statement of Cash Flows for the years ended(Expressed in thousands of Canadian dollars) 52-weeks 53-weeks February 2, February 3, 2013 Note Cash flows Operating activities Net earnings for the year Adjustments for: Depreciation and amortization Interest accrual long-term debt Amortization of debt issue costs Excess of receipts over amount recognized on derivative 250,094 47,898 592 220,985 39,284 1,133 1,272 financial instruments Recognition of deferred leasing costs Recognition of deferred tenant allowances Deferred lease inducements Deferred tenant allowances Share-based compensation Deferred income taxes Loss on disposal of assets 465 295 3,750 6,058 4,053 4,469 5,328 6,832 1,558 4,189 281,237 24,198) 257,039 Changes in non-cash working capital components 308,378 Net cash generated from operating activities Investing activities Additions to property and equipment Additions to intangible assets Proceeds on disposal of property and equipment (8,210 256 8 Net cash used by investing activities (106,846) Financing activities Proceeds from senior unsecured notes Disbursements on long-term debt Proceeds from bank indebtedness Repayment of bank indebtedness Payment of debt issue costs Repayment of finance leases Dividends paid Repurchase and cancellation of shares Issuance of common shares 10 400,000 (264,420) 166,000 (166,000) (2,797) (985) (38,418) (277,438) 1,430 (10,361) (837) (695) (30,972) (155,942) 1,594 13 Net cash used by financing activities Increase (decrease) in cash and cash equivalents Cash and cash equivalents Beginning of year Cash and cash equivalents End of year (182,628) 18,904 (197,213) (17,705) 70,271 52,566 71,470 52,566 Cash payment of interest Cash payment of income taxes 6,025 89,801 7,639 75,090 DOLLARAMA INC.'S 2014 CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY Dollarama Inc. Consolidated Statement of Changes in Shareholders' Equity for the years ended (Expressed in thousands of Canadian dollars except share amounts) Accumulated other Number of common shares Share Contributed Retained comprehensive capital Note Surplus earnings income Total Balance- January 29, 2012 Net earnings for the year Other comprehensive income 73,807,542 525,024 15,659 352,287 220,985 1,976 894,946 220,985 Unrealized gain on derivative financial instruments, net of reclassification adjustment and income tax of $308 785 (155,942) (32,436) 1,594 1,558 13 785 Repurchase and cancellation of shares 13 Dividends declared Issuance of common shares Share-based compensation Reclassification related to (2,583,264) (18,372) (137,570) (32,436) 13 1,866,192 13 1,594 1,558 (9,060) 8,157 exercise of stock options Balance February 3, 2013 Net earnings for the year Other comprehensive income 9,060 73,090,470 517,306 403,266 2,761 931,490 250,094 250,094 Unrealized gain on derivative financial instruments, net of reclassification adjustment and income tax of $3,808 10,441 10,441 Repurchase and cancellation 293,201) (40,141) 1,430 4,053 of shares Dividends declared 13 (3,720,418) (26,460) (266,741) (40,141) Issuance of common shares 13 108,817 1,430 Share-based compensation exercise of stock options Balance February 2, 2014 4,053 1,326 (1,326) 10,884 Reclassification related to 69.478,869 493,602 346,478 13,202 864,166