COULD YOU PLEASE HELP ME WITH PART-A AND PART-B?
1 1 of 5 + 80% >> (IN MILLIONS OF $) DELTACO CONSOLIDATED BALANCE SHEETS (IN MILLIONS OF $) Year ended Dec. 31, 2019 Year ended Dec 31, 2018 $(118.3) $18.9 As of Dec 31, 2019 As of Dec 31, 2018 25.8 25.5 21.7 $ 1.4 $ 7.2 6.1 3.6 6.3 118.2 3.2 2.9 19.7 16.5 3.1 10.7 18.8 5.7 0.6 ASSETS Cash & cash equivalents Accounts receivable, net Inventories Prepaid expenses and other Total current assets Property and equipment, net Operating lease right-of-use assets Goodwill Trademarks Other intangible assets Other long-term assets Total assets 33.0 161.4 OPERATING ACTIVITIES Net Income Adjustments to reconcile net income to operating cash flows: Depreciation and amortization expense Operating lease asset amortization Stock compensation expense Impairment of goodwill Other, net , Changes in operating assets and liabilities: Accounts receivable Inventory Prepaid expenses and other assets Accounts payable Operating lease liabilities Other accrued expenses and liabilities Net cash provided by operating activities INVESTING ACTIVITIES Purchases of property and equipment Proceeds from disposal of property and equipment Other, net , Net cash used in investing activities (0.2) 156.9 258.3 192.7 220.3 1.8 (0.3) (0.2) (1.0) (0.3) (18.8) (0.3) 49.0 321.5 220.3 18.5 4.3 $ 759.0 10.8 4.6 3.1 61.8 $ 862.4 $ 19.7 34.6 18.0 $19.9 35.8 (43.7) 14.1 0.3 (29.3) (48.0) 1.3 (3.3) (50.0) 72.3 144.6 55.7 178.7 LIABILITIES & STOCKHOLDERS' EQUITY Accounts payable Accrued expenses Current portion of operating lease liabilities Total current liabilities Long-term debt, less current maturities Operating lease liabilities Other long-term liabilities Total liabilities Common stock and additional paid in capital Retained earnings Total stockholders' equity Total liabilities & stockholders' equity 257.4 102.3 86.1 560.4 333.2 (31.2) 302.0 $ 862.4 FINANCING ACTIVITIES Repurchase of common stock and warrants Proceeds from revolving credit facility Payments on revolving credit facility Other, net Net cash used in financing activities NET INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD CASH AND CASH EQUIVALENTS, END OF PERIOD (7.4) 41.0 (55.0) (4.1) (25.5) (5.8) 7.2 336.7 337.2 85.1 422.3 (16.3) 31.0 (25.0) (0.9) (11.2) 0.6 6.6 $7.2 $ 1.4 $ 759.0 Financial Statements for Week 6 Assignment - Page 2 of 5 + 80% >> DELTACO CONSOLIDATED STATEMENTS OF INCOME (IN MILLIONS OF $, EXCEPT PER SHARE AMOUNTS) DELTACO NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (EXCERPTS) Note 1. Description of Business Year ended Dec. 31, 2018 $505.5 128.9 152.0 97.7 43.8 13.3 25.8 Del Taco Restaurants, Inc. is a Delaware corporation headquartered in Lake Forest, California. The Company develops, franchises, owns, and operates Del Taco quick-service Mexican-American restaurants. At December 31, 2019, there were 300 company-operated and 296 franchise-operated Del Taco restaurants located in 15 states, including one franchise-operated unit in Guam. At December 31, 2018, there were 322 company-operated and 258 franchise-operated Del Taco restaurants located in 14 states, including one franchise-operated unit in Guam. Year ended Dec. 31, 2019 $513.0 130.7 156.1 105.4 43.9 14.5 25.5 118.2 25.7 (107.0) 7:3 0.4 (113.9) Net sales Food and paper expense Labor and related expense Occupancy expense General and administrative expense Advertising expense Depreciation and amortization expense Impairment of goodwill Other miscellaneous operating expenses Operating income (loss) Interest expense Other income Income/loss) before income taxes Income tax expense Net income/loss) Note 2. Summary of significant Accounting Policies 10.0 34.0 9.1 0.7 25.6 Property and Equipment Property and equipment includes land, buildings, leasehold improvements, restaurant and other equipment, and restaurant property leased to others. Land, buildings, leasehold improvements, property and equipment acquired or constructed in the normal course of business are initially recorded at cost. The Company records depreciation based on the estimated useful lives of assets using the straight-line method. Estimated useful lives for property and equipment are as follows: Buildings 20-35 years Leasehold improvements Shorter of useful life (typically 20 years) or lease term Buildings under finance leases Shorter of useful life (typically 20 years) or lease term Restaurant and other equipment 3-15 years Depreciation expens associated with property and equipment totaled $22.7 million for the year ended December 31, 2019 and $23.1 million for the year ended December 31, 2018. 6.7 $(118.3) $18.9 Basic earnings per share $(3.20) $ 0.50 Note 4. Property and Equipment The major components of property and equipment are as follows (in millions): Dec. 31, 2019 Land $1.9 Buildings 5.4 Restaurant and other equipment 92.0 Leasehold improvements 116.2 Restaurant property leased to others 10.9 Construction-in-progress 11.7 Property and equipment, at cost 238.1 Less Accumulated depreciation (81.2) Property and equipment, net $ 156.9 Dec. 31, 2018 $ 1.9 7.7 87.8 121.4 1.0 10.7 230.5 (69.1) $161.4 5 of 5 >> + 80% DELTACO NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (EXCERPTS) continued Note 6. Goodwill, Trademarks and Other Intangible Assets Goodwill Changes in the carrying amount of goodwill for the year ended December 31, 2019 are as follows (in millions): Goodwill Balance, December 31, 2018 $321.5 Acquisition of restaurants 4.2 Sale of restaurants (14.8) Impairment (118.2) Goodwill Balance, December 31, 2019 $ 192.7 The Company's goodwill is not amortized but is tested annually for impairment. In assessing potential goodwill impairments during the fourth quarter of 2019, the Company determined that the fair value of the Company was less than its carrying value and recognized an impairment charge of $118.2 million, equal to the excess of the carrying amount above fair value. Trademarks We have registered Del Taco, Un freshing Believable, Buck & Under Menu, Epic Burritose, Beyond Taco and certain other names used by our restaurants as trademarks or service marks with the United States Patent and Trademark Office and in approximately nine foreign countries. The Company's trademarks are not amortized but are tested annually for impairment. During the fourth quarter of 2019, the Company performed a quantitative impairment analysis of its indefinite-lived trademarks. Based on this analysis, the fair value of the Company's trademark was greater than its carrying value, and as such, no impairment was needed. The carrying value of trademarks was $220.3 million at both December 31, 2019 and December 31, 2018. other intangible Assets The company's other intangible assets consisted of the following as of December 31, 2019 (in millions): Gross Net Carrying Accumulated Carrying Amount Amortization Amount Sublease Assets $ 1.3 $(0.1) $ 1.2 Franchise Rights 15.3 (5.7) 9.6 Total Other Intangible Assets $ 16.6 $(5.8) $10.8 Sublease assets are amortized using the straight-line method over the remaining life of the sublease. The weighted-average amortization period as of December 31, 2019 for sublease assets was 14.3 years. Franchise rights are amortized using the straight-line method over the remaining life of the franchise agreements or 40 years, whichever is less. The weighted-average amortization period as of December 31, 2019 for franchise rights was 12.9 years. Amortization expense for these assets totaled $2.8 million for the year ended December 31, 2019 and $2.7 million for the year ended December 31, 2018. AutoSave Off HUB Word File Home Insert Draw Design Layout References Mailings Review View Help Share Comments L II.XIIII.1.III.2.!!!!!!!!!!!!!!!!!!.5.::I:::6!!!!!!! Part A - Depreciation Methods Use the information about Bam! Board Corporation to fill in the blanks on the following two charts. Bam! Board Corporation is a company that manufactures and sells bodyboards. On 1/1/20, the company purchases a piece of manufacturing equipment for $480,000 cash. The expected residual value is $30,000 and the useful life is 3 years. Assume that Bam! Board Corporation uses the Straight Line method of depreciation. 2020 2021 2022 Depreciation Expense for the year - IIII!!!!!!!!!!!!!!!!!!!!!!!!!!!!! Accumulated Depreciation at year-end Net PP&E on the year-end Balance Sheet Assume that Bam! Board Corporation uses the Double-Declining Balance method of depreciation. 2020 2021 2022 Depreciation Expense for the year Accumulated Depreciation at year-end Net PP&E on the year-end Balance Sheet Page 1 of 2 318 words Focus + 90% lica AutoSave patibility Mode - Word File Home Insert Draw Design Share Comments Layout References Mailings Review View Help ...........1......2..................5....6......... Part B - Financial Statement Inferences related to PP&E and Intangible Assets Use Del Taco Restaurant Inc.'s financial statements to answer to the following questions. * Recreate the journal entry (accounts and amounts) that Del Taco made related to PP&E purchases during the most recent fiscal year. Assume that all PP&E was purchased with cash. Recreate the journal entry (accounts and amounts) that Del Taco made to record the most recent fiscal year's depreciation expense. Recreate the journal entry (accounts and amounts) that Del Taco made to record disposals of PP&E during the most recent fiscal year. ILL11161111111511111.4, 1.11.13.,11...2...1...1 Recreate the journal entry (accounts and amounts) that Del Taco made to record the most recent fiscal year's amortization expense on its finite-life intangible assets. Did Del Taco record a Goodwill impairment in the most recent fiscal year (Yes or No)? If YES, recreate the journal entry (accounts and amounts) that Del Taco made to record the impairment of its goodwill. Page 2 of 2 318 words Focus 90% la AutoSave ility Mode - Word 7 o File Home Insert Draw Design Layout Share Comments References Mailings Review View Help XI...1......2..................5......6......... L Did Del Taco record a Trademark impairment in the most recent fiscal year (Yes or No)? If YES, recreate the journal entry (accounts and amounts) that Del Taco made to record the impairment of its trademarks. ...11.16.,11...5...1...4...1...3...1...2...1.,11...1... Page 3 of 3 318 words D Focus 909 ri I 1 1 of 5 + 80% >> (IN MILLIONS OF $) DELTACO CONSOLIDATED BALANCE SHEETS (IN MILLIONS OF $) Year ended Dec. 31, 2019 Year ended Dec 31, 2018 $(118.3) $18.9 As of Dec 31, 2019 As of Dec 31, 2018 25.8 25.5 21.7 $ 1.4 $ 7.2 6.1 3.6 6.3 118.2 3.2 2.9 19.7 16.5 3.1 10.7 18.8 5.7 0.6 ASSETS Cash & cash equivalents Accounts receivable, net Inventories Prepaid expenses and other Total current assets Property and equipment, net Operating lease right-of-use assets Goodwill Trademarks Other intangible assets Other long-term assets Total assets 33.0 161.4 OPERATING ACTIVITIES Net Income Adjustments to reconcile net income to operating cash flows: Depreciation and amortization expense Operating lease asset amortization Stock compensation expense Impairment of goodwill Other, net , Changes in operating assets and liabilities: Accounts receivable Inventory Prepaid expenses and other assets Accounts payable Operating lease liabilities Other accrued expenses and liabilities Net cash provided by operating activities INVESTING ACTIVITIES Purchases of property and equipment Proceeds from disposal of property and equipment Other, net , Net cash used in investing activities (0.2) 156.9 258.3 192.7 220.3 1.8 (0.3) (0.2) (1.0) (0.3) (18.8) (0.3) 49.0 321.5 220.3 18.5 4.3 $ 759.0 10.8 4.6 3.1 61.8 $ 862.4 $ 19.7 34.6 18.0 $19.9 35.8 (43.7) 14.1 0.3 (29.3) (48.0) 1.3 (3.3) (50.0) 72.3 144.6 55.7 178.7 LIABILITIES & STOCKHOLDERS' EQUITY Accounts payable Accrued expenses Current portion of operating lease liabilities Total current liabilities Long-term debt, less current maturities Operating lease liabilities Other long-term liabilities Total liabilities Common stock and additional paid in capital Retained earnings Total stockholders' equity Total liabilities & stockholders' equity 257.4 102.3 86.1 560.4 333.2 (31.2) 302.0 $ 862.4 FINANCING ACTIVITIES Repurchase of common stock and warrants Proceeds from revolving credit facility Payments on revolving credit facility Other, net Net cash used in financing activities NET INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD CASH AND CASH EQUIVALENTS, END OF PERIOD (7.4) 41.0 (55.0) (4.1) (25.5) (5.8) 7.2 336.7 337.2 85.1 422.3 (16.3) 31.0 (25.0) (0.9) (11.2) 0.6 6.6 $7.2 $ 1.4 $ 759.0 Financial Statements for Week 6 Assignment - Page 2 of 5 + 80% >> DELTACO CONSOLIDATED STATEMENTS OF INCOME (IN MILLIONS OF $, EXCEPT PER SHARE AMOUNTS) DELTACO NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (EXCERPTS) Note 1. Description of Business Year ended Dec. 31, 2018 $505.5 128.9 152.0 97.7 43.8 13.3 25.8 Del Taco Restaurants, Inc. is a Delaware corporation headquartered in Lake Forest, California. The Company develops, franchises, owns, and operates Del Taco quick-service Mexican-American restaurants. At December 31, 2019, there were 300 company-operated and 296 franchise-operated Del Taco restaurants located in 15 states, including one franchise-operated unit in Guam. At December 31, 2018, there were 322 company-operated and 258 franchise-operated Del Taco restaurants located in 14 states, including one franchise-operated unit in Guam. Year ended Dec. 31, 2019 $513.0 130.7 156.1 105.4 43.9 14.5 25.5 118.2 25.7 (107.0) 7:3 0.4 (113.9) Net sales Food and paper expense Labor and related expense Occupancy expense General and administrative expense Advertising expense Depreciation and amortization expense Impairment of goodwill Other miscellaneous operating expenses Operating income (loss) Interest expense Other income Income/loss) before income taxes Income tax expense Net income/loss) Note 2. Summary of significant Accounting Policies 10.0 34.0 9.1 0.7 25.6 Property and Equipment Property and equipment includes land, buildings, leasehold improvements, restaurant and other equipment, and restaurant property leased to others. Land, buildings, leasehold improvements, property and equipment acquired or constructed in the normal course of business are initially recorded at cost. The Company records depreciation based on the estimated useful lives of assets using the straight-line method. Estimated useful lives for property and equipment are as follows: Buildings 20-35 years Leasehold improvements Shorter of useful life (typically 20 years) or lease term Buildings under finance leases Shorter of useful life (typically 20 years) or lease term Restaurant and other equipment 3-15 years Depreciation expens associated with property and equipment totaled $22.7 million for the year ended December 31, 2019 and $23.1 million for the year ended December 31, 2018. 6.7 $(118.3) $18.9 Basic earnings per share $(3.20) $ 0.50 Note 4. Property and Equipment The major components of property and equipment are as follows (in millions): Dec. 31, 2019 Land $1.9 Buildings 5.4 Restaurant and other equipment 92.0 Leasehold improvements 116.2 Restaurant property leased to others 10.9 Construction-in-progress 11.7 Property and equipment, at cost 238.1 Less Accumulated depreciation (81.2) Property and equipment, net $ 156.9 Dec. 31, 2018 $ 1.9 7.7 87.8 121.4 1.0 10.7 230.5 (69.1) $161.4 5 of 5 >> + 80% DELTACO NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (EXCERPTS) continued Note 6. Goodwill, Trademarks and Other Intangible Assets Goodwill Changes in the carrying amount of goodwill for the year ended December 31, 2019 are as follows (in millions): Goodwill Balance, December 31, 2018 $321.5 Acquisition of restaurants 4.2 Sale of restaurants (14.8) Impairment (118.2) Goodwill Balance, December 31, 2019 $ 192.7 The Company's goodwill is not amortized but is tested annually for impairment. In assessing potential goodwill impairments during the fourth quarter of 2019, the Company determined that the fair value of the Company was less than its carrying value and recognized an impairment charge of $118.2 million, equal to the excess of the carrying amount above fair value. Trademarks We have registered Del Taco, Un freshing Believable, Buck & Under Menu, Epic Burritose, Beyond Taco and certain other names used by our restaurants as trademarks or service marks with the United States Patent and Trademark Office and in approximately nine foreign countries. The Company's trademarks are not amortized but are tested annually for impairment. During the fourth quarter of 2019, the Company performed a quantitative impairment analysis of its indefinite-lived trademarks. Based on this analysis, the fair value of the Company's trademark was greater than its carrying value, and as such, no impairment was needed. The carrying value of trademarks was $220.3 million at both December 31, 2019 and December 31, 2018. other intangible Assets The company's other intangible assets consisted of the following as of December 31, 2019 (in millions): Gross Net Carrying Accumulated Carrying Amount Amortization Amount Sublease Assets $ 1.3 $(0.1) $ 1.2 Franchise Rights 15.3 (5.7) 9.6 Total Other Intangible Assets $ 16.6 $(5.8) $10.8 Sublease assets are amortized using the straight-line method over the remaining life of the sublease. The weighted-average amortization period as of December 31, 2019 for sublease assets was 14.3 years. Franchise rights are amortized using the straight-line method over the remaining life of the franchise agreements or 40 years, whichever is less. The weighted-average amortization period as of December 31, 2019 for franchise rights was 12.9 years. Amortization expense for these assets totaled $2.8 million for the year ended December 31, 2019 and $2.7 million for the year ended December 31, 2018. AutoSave Off HUB Word File Home Insert Draw Design Layout References Mailings Review View Help Share Comments L II.XIIII.1.III.2.!!!!!!!!!!!!!!!!!!.5.::I:::6!!!!!!! Part A - Depreciation Methods Use the information about Bam! Board Corporation to fill in the blanks on the following two charts. Bam! Board Corporation is a company that manufactures and sells bodyboards. On 1/1/20, the company purchases a piece of manufacturing equipment for $480,000 cash. The expected residual value is $30,000 and the useful life is 3 years. Assume that Bam! Board Corporation uses the Straight Line method of depreciation. 2020 2021 2022 Depreciation Expense for the year - IIII!!!!!!!!!!!!!!!!!!!!!!!!!!!!! Accumulated Depreciation at year-end Net PP&E on the year-end Balance Sheet Assume that Bam! Board Corporation uses the Double-Declining Balance method of depreciation. 2020 2021 2022 Depreciation Expense for the year Accumulated Depreciation at year-end Net PP&E on the year-end Balance Sheet Page 1 of 2 318 words Focus + 90% lica AutoSave patibility Mode - Word File Home Insert Draw Design Share Comments Layout References Mailings Review View Help ...........1......2..................5....6......... Part B - Financial Statement Inferences related to PP&E and Intangible Assets Use Del Taco Restaurant Inc.'s financial statements to answer to the following questions. * Recreate the journal entry (accounts and amounts) that Del Taco made related to PP&E purchases during the most recent fiscal year. Assume that all PP&E was purchased with cash. Recreate the journal entry (accounts and amounts) that Del Taco made to record the most recent fiscal year's depreciation expense. Recreate the journal entry (accounts and amounts) that Del Taco made to record disposals of PP&E during the most recent fiscal year. ILL11161111111511111.4, 1.11.13.,11...2...1...1 Recreate the journal entry (accounts and amounts) that Del Taco made to record the most recent fiscal year's amortization expense on its finite-life intangible assets. Did Del Taco record a Goodwill impairment in the most recent fiscal year (Yes or No)? If YES, recreate the journal entry (accounts and amounts) that Del Taco made to record the impairment of its goodwill. Page 2 of 2 318 words Focus 90% la AutoSave ility Mode - Word 7 o File Home Insert Draw Design Layout Share Comments References Mailings Review View Help XI...1......2..................5......6......... L Did Del Taco record a Trademark impairment in the most recent fiscal year (Yes or No)? If YES, recreate the journal entry (accounts and amounts) that Del Taco made to record the impairment of its trademarks. ...11.16.,11...5...1...4...1...3...1...2...1.,11...1... Page 3 of 3 318 words D Focus 909 ri
