CASE 1 Focus on Financials Account for cash and cash equivalents and accounts receivable Canadian Tire Corporation Refer to Canadian Tire's financial statements in Appendix A at the end of the book. Suppose Canadian Tire's bank statement has just arrived at company headquarters. Further assume the bank statement shows Canadian Tire's cash balance at S664.2 million and also assume that cash and cash equivalents has a balance of $658.2 million on the books. MyAccountingLab 1. You must determine how much to report for cash and cash equivalents on the January 3, 2015 balance sheet. Suppose you uncover these reconciling items (all amounts in millions): a. Interest earned on bank balance, $2.2 b. Outstanding cheques, $6.4 C. Bank collections of various items, $4 d. Deposits in transit, $4.3 e. Transposition error-Canadian Tire overstated cash by $1.3 f. Bank charges of $1 Prepare a bank reconciliation to show how Canadian Tire arrived at the correct amount of cash and cash equivalents to report on its January 3, 2015, balance sheet. Journal entries are not required. 2. How much were Canadian Tire's receivables at January 3, 2015, and December 2 2013? What can you assume from this information? 3. Assume that Canadian Tire wrote off $125 million as uncollectible. How much di Canadian Tire collect from customers during 2014? u balance Sheets A at Simion January 2015 De $ 802.1 6422 4168 7585 4,097 1.4810 ASSETS Cash and casheg o tea Short-term Investments Mote Trade and other rob otie 19 Loons receivable lote 11) . Merchandise Inventores Income taxes recoverable Prepaid expenses and deposits Assets classified as held for sale Note 12 Total current assets Long term recevables and other ass ote 133 Long term Investments Goodwil and intangible asseta (Note 14) Investment property Note 15 Property and equipment Note 16 Deferred Income taxes poto 10 Total assets 40.S 1,823.8 319 1005 131 ,5102 7,8778 BOBO 1347 1.185.5 170.0 121. 1486 274.1 3,516.1 39.A $ 14,553.2 13.630.0 $ 163 90 1,1784 1,8174 1,9012 200.0 6112 57.5 272.2 LIABILITIES Bank Indebted No Deposits lote 19) Trade and other payables lote 20 Provisions Note 21) Short-term borrowings rote 23 Loans payable o 24) Income taxes payable Current portion of long-term date Note 2 Total current abilities Long-term provon 21) Longe date 29 Long term depois de 19 Deferred Income Note 1) Other long-term s Note 28 Total abilities BOLA 54.0 687.5 4,578.8 44.1 2,131.6 1 03.0 23301 1.1520 1004 228.3 8,922.4 8,100.1 712.9 47A 40LS EQUITY Share capital Note 20 Contbuted surplus Accurated other comprehensive Income Retalhedens Equity attributable to owners of Canadian The Corporation Non-controlling Interest Note 17 Total equity Total abilities and equity 695.5 2.0 82.0 4,075.1 4,855.6 775. 5.830 $ 14,863. 2 5.173 5,4499 1 3.630,0 The related notes formen tegal part of these consoldated francial statements. thamuthians thula Villaw shaye Babe Maureen Director Graham W. Savage Director DOLCE Consolidated Statements of Income For the years ended C$ in millions, except par shore amounts January 2, 2015 $ December 28, 2013 $ 11,785.6 18.063.3 3,722.3 3.0 Revenue (Noto 30 Cost of producing revenue Note 31) Gross margin Other Income (expense) Seling, general and administrative expenses (Note 32) Net finance costs (Note 33) Change in fair value of redeemable financial instrument (Note 35) Income before Income taxes Income taxes (Note 18) Net Income Net Income attributable to: Owners of Canadian Tire Corporation Non-controlling interests (Note 17) 12,462.9 (8,416.9) 4,046.0 11.0 (3,052.9) (108.9) (17.0 8782 (238.9) 639.3 2,828.9) (105.8) 784.6 (220.2 564.4 S $ $ $ $ 604.0 35.3 639.3 7.65 7.59 $ $ $ 561.2 3.2 584.4 6.96 6.91 Basic earnings per share attributable to owners of Canadian Tire Corporation Diluted earnings per share attributable to owners of Canadian Tire Corporation Weighted average number of Common and Class A Non-Voting Shares outstanding Basic Diluted 78,960,025 79,612,957 80,652,472 81,180,863 The related notes form an integral part of these consolidated financial statements. CASE 1 Focus on Financials Account for cash and cash equivalents and accounts receivable Canadian Tire Corporation Refer to Canadian Tire's financial statements in Appendix A at the end of the book. Suppose Canadian Tire's bank statement has just arrived at company headquarters. Further assume the bank statement shows Canadian Tire's cash balance at S664.2 million and also assume that cash and cash equivalents has a balance of $658.2 million on the books. MyAccountingLab 1. You must determine how much to report for cash and cash equivalents on the January 3, 2015 balance sheet. Suppose you uncover these reconciling items (all amounts in millions): a. Interest earned on bank balance, $2.2 b. Outstanding cheques, $6.4 C. Bank collections of various items, $4 d. Deposits in transit, $4.3 e. Transposition error-Canadian Tire overstated cash by $1.3 f. Bank charges of $1 Prepare a bank reconciliation to show how Canadian Tire arrived at the correct amount of cash and cash equivalents to report on its January 3, 2015, balance sheet. Journal entries are not required. 2. How much were Canadian Tire's receivables at January 3, 2015, and December 2 2013? What can you assume from this information? 3. Assume that Canadian Tire wrote off $125 million as uncollectible. How much di Canadian Tire collect from customers during 2014? u balance Sheets A at Simion January 2015 De $ 802.1 6422 4168 7585 4,097 1.4810 ASSETS Cash and casheg o tea Short-term Investments Mote Trade and other rob otie 19 Loons receivable lote 11) . Merchandise Inventores Income taxes recoverable Prepaid expenses and deposits Assets classified as held for sale Note 12 Total current assets Long term recevables and other ass ote 133 Long term Investments Goodwil and intangible asseta (Note 14) Investment property Note 15 Property and equipment Note 16 Deferred Income taxes poto 10 Total assets 40.S 1,823.8 319 1005 131 ,5102 7,8778 BOBO 1347 1.185.5 170.0 121. 1486 274.1 3,516.1 39.A $ 14,553.2 13.630.0 $ 163 90 1,1784 1,8174 1,9012 200.0 6112 57.5 272.2 LIABILITIES Bank Indebted No Deposits lote 19) Trade and other payables lote 20 Provisions Note 21) Short-term borrowings rote 23 Loans payable o 24) Income taxes payable Current portion of long-term date Note 2 Total current abilities Long-term provon 21) Longe date 29 Long term depois de 19 Deferred Income Note 1) Other long-term s Note 28 Total abilities BOLA 54.0 687.5 4,578.8 44.1 2,131.6 1 03.0 23301 1.1520 1004 228.3 8,922.4 8,100.1 712.9 47A 40LS EQUITY Share capital Note 20 Contbuted surplus Accurated other comprehensive Income Retalhedens Equity attributable to owners of Canadian The Corporation Non-controlling Interest Note 17 Total equity Total abilities and equity 695.5 2.0 82.0 4,075.1 4,855.6 775. 5.830 $ 14,863. 2 5.173 5,4499 1 3.630,0 The related notes formen tegal part of these consoldated francial statements. thamuthians thula Villaw shaye Babe Maureen Director Graham W. Savage Director DOLCE Consolidated Statements of Income For the years ended C$ in millions, except par shore amounts January 2, 2015 $ December 28, 2013 $ 11,785.6 18.063.3 3,722.3 3.0 Revenue (Noto 30 Cost of producing revenue Note 31) Gross margin Other Income (expense) Seling, general and administrative expenses (Note 32) Net finance costs (Note 33) Change in fair value of redeemable financial instrument (Note 35) Income before Income taxes Income taxes (Note 18) Net Income Net Income attributable to: Owners of Canadian Tire Corporation Non-controlling interests (Note 17) 12,462.9 (8,416.9) 4,046.0 11.0 (3,052.9) (108.9) (17.0 8782 (238.9) 639.3 2,828.9) (105.8) 784.6 (220.2 564.4 S $ $ $ $ 604.0 35.3 639.3 7.65 7.59 $ $ $ 561.2 3.2 584.4 6.96 6.91 Basic earnings per share attributable to owners of Canadian Tire Corporation Diluted earnings per share attributable to owners of Canadian Tire Corporation Weighted average number of Common and Class A Non-Voting Shares outstanding Basic Diluted 78,960,025 79,612,957 80,652,472 81,180,863 The related notes form an integral part of these consolidated financial statements