Calgary Compressor and Pnew Brunswick Pneumatic are competing manufacturing firms. Their financial statements are printed he 5 CALGARY COMPRESSOR Statement of Financial Position 2016 2017 $ 16,339 25,778 43,287 $ 85,404 $ 13,862 23,887 54,867 $ 92,616 99,615 (31,957) $ 67,658 1,791 13,138 $167,991 101,543 (34,331) $ 67,212 1,914 13,052 $174,794 Assets Current assets: Cash Net accounts receivable Inventory Total current assets Fixed assets: Plant, property, and equipment Less: Accumulated depreciation Net fixed assets Prepaid expenses Other assets Total assets Liabilities and Equity Current liabilities: Accounts payable Notes payable Accrued expenses Other taxes payable Total current liabilities Long-term debt Total liabilities Equity: Common stock Paid-in capital Retained earnings Total equity Total liabilities and equity $ 6,494 10,483 7,422 $ 4,893 11,617 7,227 8,460 32,197 22,036 $ 54,233 9,924 34,323 22,036 $ 56, 359 38,000 12,000 63,758 113,758 $167,991 38,000 12,000 68,435 118,435 $174,794 $162,749 1,002 $163, 751 CALGARY COMPRESSOR Statement of Comprehensive Income 2017 Income: Sales Other income Total income Operating expenses: Cost of goods sold Selling and administrative expenses Depreciation Total expenses Pre-tax earnings Taxes Net earnings 103,570 28,495 2,274 $134,339 29,412 14,890 $ 14,522 5 PNEW BRUNSWICK PNEUMATIC Statement of Financial Position 2016 2017 $ 5,794 26,177 46,463 $ 78,434 $ 3,307 22,133 44,661 $ 70,101 31,842 (19,297) $ 12,545 763 1,601 $ 93,343 31,116 (18,143) $ 12,973 688 1,385 $ 85, 147 Assets Current assets: Cash Net accounts receivable Inventory Total current assets Fixed assets: Plant, property, and equipment Less: Accumulated depreciation Net fixed assets Prepaid expenses Other assets Total assets Liabilities and Equity Current liabilities: Accounts payable Bank loans Accrued expenses Other taxes payable Total current liabilities Equity: Common stock Paid-in capital Retained earnings Less: Treasury stock Total equity Total liabilities and equity $ 6,008 3,722 4,254 5,688 19,672 $ 5,019 645 3,295 4,951 13,910 20,576 5,624 48,598 (1,127) $ 73,671 $ 93,343 20,576 5,624 46,164 (1,127) $ 71,237 $ 85,147 $ 91,374 1,067 $ 92,441 PNEW BRUNSWICK PNEUMATIC Statement of Comprehensive Income 2017 Income: Sales Other income Total income Operating expenses: Cost of goods sold Selling and administrative expenses Depreciation Total expenses Pre-tax earnings Taxes Net earnings Dividends Retained earnings 59,042 18,068 1,154 $ 78,264 14,177 6,838 $ 7,339 $ 4,905 $ 2,434 a-1. How are the current assets financed for Calgary Compressor? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.) ? Current liabilities ? Long-term debt ? Equity ? Current assets ? Revenue ? Expenses a-2. How are the current assets financed for Pnew Brunswick Pneumatic? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.) Current liabilities ? Long-term debt ? Equity ? Current assets ? Revenue ? Expenses b-1. Which firm has the larger investment in current assets? Calgary Compressor Pnew Brunswick Pneumatic b-2. Not available in Connect. C-1. Which firm is more likely to incur carrying costs? Calgary Compressor Pnew Brunswick Pneumatic c-2. Which is more likely to incur shortage costs? Calgary Compressor O Pnew Brunswick Pneumatic c-3. Not available in Connect. Calgary Compressor and Pnew Brunswick Pneumatic are competing manufacturing firms. Their financial statements are printed he 5 CALGARY COMPRESSOR Statement of Financial Position 2016 2017 $ 16,339 25,778 43,287 $ 85,404 $ 13,862 23,887 54,867 $ 92,616 99,615 (31,957) $ 67,658 1,791 13,138 $167,991 101,543 (34,331) $ 67,212 1,914 13,052 $174,794 Assets Current assets: Cash Net accounts receivable Inventory Total current assets Fixed assets: Plant, property, and equipment Less: Accumulated depreciation Net fixed assets Prepaid expenses Other assets Total assets Liabilities and Equity Current liabilities: Accounts payable Notes payable Accrued expenses Other taxes payable Total current liabilities Long-term debt Total liabilities Equity: Common stock Paid-in capital Retained earnings Total equity Total liabilities and equity $ 6,494 10,483 7,422 $ 4,893 11,617 7,227 8,460 32,197 22,036 $ 54,233 9,924 34,323 22,036 $ 56, 359 38,000 12,000 63,758 113,758 $167,991 38,000 12,000 68,435 118,435 $174,794 $162,749 1,002 $163, 751 CALGARY COMPRESSOR Statement of Comprehensive Income 2017 Income: Sales Other income Total income Operating expenses: Cost of goods sold Selling and administrative expenses Depreciation Total expenses Pre-tax earnings Taxes Net earnings 103,570 28,495 2,274 $134,339 29,412 14,890 $ 14,522 5 PNEW BRUNSWICK PNEUMATIC Statement of Financial Position 2016 2017 $ 5,794 26,177 46,463 $ 78,434 $ 3,307 22,133 44,661 $ 70,101 31,842 (19,297) $ 12,545 763 1,601 $ 93,343 31,116 (18,143) $ 12,973 688 1,385 $ 85, 147 Assets Current assets: Cash Net accounts receivable Inventory Total current assets Fixed assets: Plant, property, and equipment Less: Accumulated depreciation Net fixed assets Prepaid expenses Other assets Total assets Liabilities and Equity Current liabilities: Accounts payable Bank loans Accrued expenses Other taxes payable Total current liabilities Equity: Common stock Paid-in capital Retained earnings Less: Treasury stock Total equity Total liabilities and equity $ 6,008 3,722 4,254 5,688 19,672 $ 5,019 645 3,295 4,951 13,910 20,576 5,624 48,598 (1,127) $ 73,671 $ 93,343 20,576 5,624 46,164 (1,127) $ 71,237 $ 85,147 $ 91,374 1,067 $ 92,441 PNEW BRUNSWICK PNEUMATIC Statement of Comprehensive Income 2017 Income: Sales Other income Total income Operating expenses: Cost of goods sold Selling and administrative expenses Depreciation Total expenses Pre-tax earnings Taxes Net earnings Dividends Retained earnings 59,042 18,068 1,154 $ 78,264 14,177 6,838 $ 7,339 $ 4,905 $ 2,434 a-1. How are the current assets financed for Calgary Compressor? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.) ? Current liabilities ? Long-term debt ? Equity ? Current assets ? Revenue ? Expenses a-2. How are the current assets financed for Pnew Brunswick Pneumatic? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.) Current liabilities ? Long-term debt ? Equity ? Current assets ? Revenue ? Expenses b-1. Which firm has the larger investment in current assets? Calgary Compressor Pnew Brunswick Pneumatic b-2. Not available in Connect. C-1. Which firm is more likely to incur carrying costs? Calgary Compressor Pnew Brunswick Pneumatic c-2. Which is more likely to incur shortage costs? Calgary Compressor O Pnew Brunswick Pneumatic c-3. Not available in Connect