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LAKELAND CORPORATION Statement of Income and Retained Earnings For Years Ended December 31, Year 5 and Year 4 Year 4 Year 5 Year 4 $ 1,387,000 $41,700,000 25,000 LAKELAND CORPORATION Balance Sheet December 31, Year 5 and Year 4 Year 5 Assets Current assets Cash $ 1,610,000 Marketable securities 510,000 Accounts receivable, less allowance for bad debts Year 5. $125,000; Year 4. $110,000 4,075,000 Inventories, at lower of cost or market 7,250,000 Prepaid expenses 125,000 Total current assets 13,570,000 Plant and equipment, at cost Land and buildings 13,500,000 Machinery and equipment 9,250,000 Total plant and equipment 22.750,000 Less. Accumulated depreciation 13.470,000 Total plant and equipment net 9,280,000 Long-term receivables 250,000 Deferred charges.. 25,000 Total assets $23,125,000 3.669,000 7,050,000 218.000 12,324,000 $48,400,000 70,000 30,000 $48,500,000 $41.725,000 Revenues Net sales Royalties Interest Total revenues Costs and expenses Cost of sales Selling, general, and administrative Interest on 5% sinking fund debentures Provision for federal income taxes Total costs and expenses Net income 13,500,000 8,520,000 22,020,000 12.549,000 9,471,000 250,000 75,000 $22,120,000 $31,460,000 12,090,000 275,000 2,315,000 $46,140,000 $ 2,360,000 $29,190,000 8.785.000 300,000 1,695,000 $39.970,000 $ 1,755,000 7,965,000 $10,325,000 6,760,000 $ 8,515,000 50,000 50,000 $ 2,950,000 1,575,000 875,000 500,000 5,900,000 $ 3,426,000 1,644,000 750,000 500,000 6,320,000 Retained earnings, beginning of year Subtotal Dividends paid Preferred stock. $1.00 per share in cash Common stock Cash $1.00 per share Stock10%)-50,000 shares at market value of $50 per share Total dividends paid. Retained earnings, end of year 525,000 500.000 2,500,000 $ 3,075,000 $ 7,250,000 $ 550,000 $ 7,965,000 Liabilities and Shareholders' Equity Current liabilities Accounts payable Accrued expenses Federal taxes payable Current maturities on long-term debit Total current liabilities Other liabilities 5% sinking fund debentures, due January 1, Year 16 ($500,000 redeemable annually Deferred taxes on income, due to depreciation Total other liabilities Shareholders' equity Preferred stock, $ cumulative, $20 par, preference on liquidation $100 per share (authorized: 100,000 shares: issued and outstanding: 50,000 shares) Common stock, $1 par (authorized: 900,000 shares issued and outstanding: Year 5,550,000 shares Year 4.500.000 shares) Capital in excess of par value on common stock Retained eamings Total shareholders' equity Total liabilities and shareholders' equity 5,000,000 350,000 5,350,000 5,500,000 210,000 5,710,000 1,000,000 1,000,000 550,000 3,075,000 7,250,000 11,875,000 $23,125,000 500,000 625,000 7.965,000 10,090,000 $22.120,000 6. The Liquidity and Solvency position of the company 7. What is your recommendation to the shareholders of the company? Invest in the stock or sell? Justify your answer pointing out at least two factors present in the statement and your analysis. Concepts: 8. Briefly describe the accrual and the prudence concept