Amazing Company began operations on January 1, 2015, and is now in its fourth year of operations. It is a retail sales company with a large amount of online sales. The adjusted trial balance as of December 31, 2019 appears below, along with prior year balance sheet data and some additional transaction data for 2018. AMAZING COMPANY Adjusted Trial Balance 12/31/2019 Account Title $ Cash Accounts Receivable Prepaid Insurance Inventory Office Equipment Machinery & Tools Accumulated Depreciation Accounts Payable Salaries Payable Sales Tax Payable Note Payable-Long Term Common Stock, $10 par Retained Earnings Dividends Sales Revenue Cost of Goods Sold Rent Expense Salaries Expense Insurance Expense Legal Fees Depreciation Expense Interest Expense Income Tax Expense 2019 Adjusted Trial Balance Debit Credit 120,000 $ 55,000 5,000 36,000 53,000 59,000 $ 24,000 12,200 2,600 2,000 23,000 240,000 38,600 10,000 240,000 142,600 20,000 48,000 11,800 9,200 8,000 1,800 3,000 582,400 $ 582,400$ 2018 Post-Closing Trial Balance Debit Credit 125,600 35,000 6,000 15,600 47,000 21,000 16,000 16,800 2,700 4,000 12,100 160,000 38,600 $ 250,200 250,200 Transaction Data for 2018 (Note, these transactions were included in the trial balance numbers above.) Cash paid for purchase of office equipment $ 6,000 Cash paid for purchase of tools 15,000 Acquisition of Machinery with Notes Payable-Long-term 23,000 Cash payment of dividends 10,000 Cash receipt from issuance of 8,000 shares of common stock 80,000 Requirements: (See sheet tabs at bottom. Use each sheet for the following requirements.) Use Excel Skills in completing these requirements. You must use formulas and functions, cell references, and professional formatting. 1. Prepare the Amazing Company multi-step income statement for the year ended December 31, 2019. Include the EPS at the bottom. Also include a vertical analysis column at the right and perform a vertical analysis of the income statement. (Use percentage format with 2 decimal places.) 2. Prepare the Amazing Company balance sheet for December 31, 2019. Include a vertical analysis column at the right and perform a vertical analysis of the balance sheet. (Use the percentage format with 2 decimal places.) 3. Prepare the Amazing Company statement of cash flows for the year ended December 31, 2019. Use the indirect method and the format in your textbook. 4. Complete the analysis of the financial statements as directed on the Analysis sheet. 5. Complete the analyis of the investment options between this company and EBUY (ratios given). Also use the chart from the attached article, and any other source to analyze the impact of using GAAP vs. IFRS> Write short response (15-30 sentences) on your analysis. Using the information provided in the instructions and the financial statements you have created in the previous requirements, perform the following analysis (5 Requirements: Current Ratio Working Capital Debt-to- Debt Ratio Equity Ratio Cash Ratio Requirement 1. Compute these ratios: Fundraising onalakcesor malas porcentages or oumerway as 3gnone Accounts Days Sales Inventory Days Sales in Gross Profit Receivable in Turnover Inventory Percentage Turnover Receivables 2018 Total Assets = Asset Rate of Return on Total Assets Rate of Return on Stockholders Earnings 'Equity Per Share Turnover Ratio 2018 SHE "Current Stock Price is $10.00 per share Price/ Earnings Ratio Dividend Yield Dividend Payout Dividend per share Requirement 2. Based on the ratios computed above, analyze the company's ability to pay its debts (both current and long term). Refer to at least 3 specific ratios in your analysis. Requirement 3: Based on the ratios computed above, analyze the company's management of inventory. Refer to at least 2 specific ratios in your analysis. Requirement 4: Based on the ratios computed above, analyze the company's management of receivables. Refer to at least 2 specific ratios in your analysis. You have just received a large annual bonus at work, and have decided to invest it in stocks for your retirement. You have been analyzing different stocks and have narrowed your choice to two possibilities. You can either invest in Amazing Company, or in EBUY. EBUY's ratios are given below. Select 3 ratios you might use to determine which stock to invest in and make a choice. Defend your selection with quality reasoning. The second part of your analysis is to read the article attached to this assignment. On pages 117-120, there is a chart that summarizes some of the differences between GAAP and IFRS. Explain the general similarities and differences, and discuss how interest expense would be presented on the Statement of Cash Flows. Include in your discussion any differences between GAAP and IFRS. Would that impact your investment decision above? Your answer will be graded on analysis, logic, and writing skills. EBUY Ratios: 1. Which three ratios would you choose to analyze which company would be a better INVESTMENT for you? Current Working Ratio Capital 5.00 $ 300,000 Debt-to- Equity Ratio 0.40 Cash Ratio Debt Ratio 4.00 0.35 Days Days Sales Accounts Sales in Inventory in Gross Profit Receivable Receiva Turnover Inventory Percentage Turnover bles 7.25 48% 7.50 50.34 48.67 2. Based on your selection, which company has better ratios? Which company would you invest in? Why? Rate of Return on Total Assets 8% Rate of Asset Return on Turnover Stockholde Earnings Ratio rs' Equity Per Share 1.50 15% 15.40 Price/ Earnings Ratio 14.50 Dividend Yield 2.00% Dividend Payout 12% Amazing Company began operations on January 1, 2015, and is now in its fourth year of operations. It is a retail sales company with a large amount of online sales. The adjusted trial balance as of December 31, 2019 appears below, along with prior year balance sheet data and some additional transaction data for 2018. AMAZING COMPANY Adjusted Trial Balance 12/31/2019 Account Title $ Cash Accounts Receivable Prepaid Insurance Inventory Office Equipment Machinery & Tools Accumulated Depreciation Accounts Payable Salaries Payable Sales Tax Payable Note Payable-Long Term Common Stock, $10 par Retained Earnings Dividends Sales Revenue Cost of Goods Sold Rent Expense Salaries Expense Insurance Expense Legal Fees Depreciation Expense Interest Expense Income Tax Expense 2019 Adjusted Trial Balance Debit Credit 120,000 $ 55,000 5,000 36,000 53,000 59,000 $ 24,000 12,200 2,600 2,000 23,000 240,000 38,600 10,000 240,000 142,600 20,000 48,000 11,800 9,200 8,000 1,800 3,000 582,400 $ 582,400$ 2018 Post-Closing Trial Balance Debit Credit 125,600 35,000 6,000 15,600 47,000 21,000 16,000 16,800 2,700 4,000 12,100 160,000 38,600 $ 250,200 250,200 Transaction Data for 2018 (Note, these transactions were included in the trial balance numbers above.) Cash paid for purchase of office equipment $ 6,000 Cash paid for purchase of tools 15,000 Acquisition of Machinery with Notes Payable-Long-term 23,000 Cash payment of dividends 10,000 Cash receipt from issuance of 8,000 shares of common stock 80,000 Requirements: (See sheet tabs at bottom. Use each sheet for the following requirements.) Use Excel Skills in completing these requirements. You must use formulas and functions, cell references, and professional formatting. 1. Prepare the Amazing Company multi-step income statement for the year ended December 31, 2019. Include the EPS at the bottom. Also include a vertical analysis column at the right and perform a vertical analysis of the income statement. (Use percentage format with 2 decimal places.) 2. Prepare the Amazing Company balance sheet for December 31, 2019. Include a vertical analysis column at the right and perform a vertical analysis of the balance sheet. (Use the percentage format with 2 decimal places.) 3. Prepare the Amazing Company statement of cash flows for the year ended December 31, 2019. Use the indirect method and the format in your textbook. 4. Complete the analysis of the financial statements as directed on the Analysis sheet. 5. Complete the analyis of the investment options between this company and EBUY (ratios given). Also use the chart from the attached article, and any other source to analyze the impact of using GAAP vs. IFRS> Write short response (15-30 sentences) on your analysis. Using the information provided in the instructions and the financial statements you have created in the previous requirements, perform the following analysis (5 Requirements: Current Ratio Working Capital Debt-to- Debt Ratio Equity Ratio Cash Ratio Requirement 1. Compute these ratios: Fundraising onalakcesor malas porcentages or oumerway as 3gnone Accounts Days Sales Inventory Days Sales in Gross Profit Receivable in Turnover Inventory Percentage Turnover Receivables 2018 Total Assets = Asset Rate of Return on Total Assets Rate of Return on Stockholders Earnings 'Equity Per Share Turnover Ratio 2018 SHE "Current Stock Price is $10.00 per share Price/ Earnings Ratio Dividend Yield Dividend Payout Dividend per share Requirement 2. Based on the ratios computed above, analyze the company's ability to pay its debts (both current and long term). Refer to at least 3 specific ratios in your analysis. Requirement 3: Based on the ratios computed above, analyze the company's management of inventory. Refer to at least 2 specific ratios in your analysis. Requirement 4: Based on the ratios computed above, analyze the company's management of receivables. Refer to at least 2 specific ratios in your analysis. You have just received a large annual bonus at work, and have decided to invest it in stocks for your retirement. You have been analyzing different stocks and have narrowed your choice to two possibilities. You can either invest in Amazing Company, or in EBUY. EBUY's ratios are given below. Select 3 ratios you might use to determine which stock to invest in and make a choice. Defend your selection with quality reasoning. The second part of your analysis is to read the article attached to this assignment. On pages 117-120, there is a chart that summarizes some of the differences between GAAP and IFRS. Explain the general similarities and differences, and discuss how interest expense would be presented on the Statement of Cash Flows. Include in your discussion any differences between GAAP and IFRS. Would that impact your investment decision above? Your answer will be graded on analysis, logic, and writing skills. EBUY Ratios: 1. Which three ratios would you choose to analyze which company would be a better INVESTMENT for you? Current Working Ratio Capital 5.00 $ 300,000 Debt-to- Equity Ratio 0.40 Cash Ratio Debt Ratio 4.00 0.35 Days Days Sales Accounts Sales in Inventory in Gross Profit Receivable Receiva Turnover Inventory Percentage Turnover bles 7.25 48% 7.50 50.34 48.67 2. Based on your selection, which company has better ratios? Which company would you invest in? Why? Rate of Return on Total Assets 8% Rate of Asset Return on Turnover Stockholde Earnings Ratio rs' Equity Per Share 1.50 15% 15.40 Price/ Earnings Ratio 14.50 Dividend Yield 2.00% Dividend Payout 12%