Applying and Analyzing Inventory Costing Methods At the beginning of the current period, Chen carried 1,000 units of its product with a unit cost of $32. A summary of purchases during the current period follows.

	Units	Unit Cost	Cost
Beginning Inventory	1,000	$32	$32,000
Purchase #1	1,800	34	61,200
Purchase #2	800	38	30,400
Purchase #3	1,200	41	49,200

During the current period, Chen sold 2,800 units.

(a) Assume that Chen uses the first-in, first-out method. Compute both cost of good sold for the current period and the ending inventory balance. Use the financial statement effects template to record cost of goods sold for the period.

Ending inventory balance $Answer

Cost of goods sold $Answer

Use negative signs with answers, when appropriate.

a) Prepare the income statement, the balance sheet, and the statement of cash flows for Cisco Systems for the fiscal year ended July 30, 2016. Hint: Enter negative numbers only in answers for the statement of cash flows (if applicable).

Cisco Systems, Inc Income Statement ($ millions) For Year Ended July 30, 2016
Sales	$Answer
AnswerExpensesCost of goods soldCash, ending year	Answer
Gross profit	Answer
AnswerExpensesCost of goods soldCash, ending year	Answer
Net income	$Answer

Cisco Systems, Inc Balance Sheet ($ millions) July 30, 2016
Cash	$Answer		Total liabilities	$Answer
AnswerNoncash assetsNet incomeCash, beginning yearStockholders' equity	Answer		AnswerNoncash assetsNet incomeCash, beginning yearStockholders' equity	Answer
Total assets	$Answer		Total liabilities and equity	$Answer

Cisco Systems, Inc Statement of Cash Flows ($ millions) For Year Ended July 30, 2016
Cash from operating activities	$Answer
AnswerNoncash assetsCash from investing activitiesCash, beginning yearNet income	Answer
Cash from financing activities	Answer
Net change in cash	Answer
AnswerNoncash assetsCash used in investing activitiesCash, beginning yearNet income	Answer
Cash, ending year	$Answer

(b) Do the negative amounts for cash from investing activities and cash from financing activities concern us? Explain.

A negative amount for cash from financing activities implies that the company is unable to pay its debts as they come due and should be interpreted negatively.

A negative amount for cash from investing activities is the result of additional borrowings. Because the additional funds are invested in earnings-generating assets, this should be viewed positively.

A negative amount for cash from investing activities implies that the market value of the company's long-term assets has declined and this change should be viewed negatively.

A negative amount for cash from financing activities reflects the reduction of long-term debt, which is a positive sign of the companys ability to retire debt obligations.

(c) Using the statements prepared for part a. compute the following ratios (for this part only, use the year-end balance instead of the average for assets and stockholders' equity):

Round answers to two decimal places (example for percentage answers: 0.12345 = 12.35%)

(i) Profit margin Answer% (ii) Asset turnover Answer (iii) Return on assets Answer% (iv) Return on equity Answer%