a. Compute the percentage change in sales, operating profit, net cash flow less capital expenditures b. Evaluate Kellogg's performance. Which trend seems most favorable? Which trend seems least favorable? What are the implications of these trends for Kellogg's sustainable performance objec Instructions and net earnings from year to year for the years presented tives? Explain Accounting, Analysis, and Principles The Amato Theater is nearing the end of the year and is preparing for a meeting with its bankers to discuss the renewal of a loan. The accounts listed below appeared in the December 31, 2020, trial balance Debit Credit $ 6,000 192,000 Prepaid Advertising Equipment Accumulated Depreciation-Equipment Notes Payable Uneared Service Revenue Ticket Revenue Advertising Expense Salaries and Wages Expense Interest Expense $ 60,000 90,000 17,500 360,000 18.680 67,600 1,400 Additional information is available as follows 1. The equipment has an estimated useful life of 16 years and a salvage value of $40.000 at the end of that time. Amato uses the straight-line method for depreciation 2. The note payable is a one-year note given to the bunk January 31 and bearing interest at 10%. Ierest is calculated on a monthly basis. 3. Late in December 2020, the theater sold 350 coupon dicket books at S50 each. Two hundred of these ticket books have been used by year-end. The cash received was recorded as Unearned Service Revenue. 4. Advertising paid in advance was $6,000 and was deb to Prepaid Advertising. The company has used $2,500 of the advertising as of December 31, 2020 5. Salaries and wages accrued but unpaid at December 31, 2020, were $3,500. Accounting Prepare any adjusting journal entries necessary for the year ended December 31, 2020. Analysis Determine Amato's income before and after recording the adjusting entries. Use your analysis to explain why Amato's bankers should be willing to wait for Amato to complete its year-end adjustment process before making a decision on the loan renewal. Principles Although Amato's bankers are willing to wait for the adjustment process to be completed before they receive financial information, they would like to receive financial reports more frequently than annually or even quarterly. What trade-offs, in terms of relevance and faithful representation, are inherent in pre paring financial statements for shorter accounting time periods? Analytics in Action Accounting software systems collect vast amounts of data about the economic events experienced by a company and about the parties with whom the company engages, such as suppliers and customers. Business decision-makers take advantage of this wealth of information by using data analytics, which often employs both software and statistics, to draw inferences and make more informed business decisions. As both data access and analytical software improve, the use of data analytics to support decisions is becoming increasingly common at virtually all types of companies. Utilizing analytic tools for decision-making often requires collecting data from a number of sources. Once collected, tools such as Excel can be used to sort, format, and organize the data so that various analytic procedures can then be performed. Instructions Go to WileyPLUS for a data analytics exercise focusing on collecting financial data from a variety of sources, which can then be used in basic financial analysis
