Instructions a. Compute the percentage change in sales, operating profit, net cash flow less capital expenditures, and net earnings from year to year for the years presented. b. Evaluate Kellogg's performance. Which trend seems most favorable? Which trend seems least favorable? What are the implications of these trends for Kellogg's sustainable performance objec- tives? Explain Accounting, Analysis, and Principles The Amato Theater is nearing the end of the year and is preparing for a meeting with its bankers to discuss the renewal of a loan. The accounts listed below appeared in the December 31, 2020, trial balance. Debit Credit $ 6,000 192,000 Prepaid Advertising Equipment Accumulated Depreciation-Equipment Notes Payable Unearned Service Revenue Ticket Revenue Advertising Expense Salaries and Wages Expense Interest Expense $ 60,000 90,000 17,500 360,000 18,680 67,600 1,400 Additional information is available as follows. 1. The equipment has an estimated useful life of 16 years and a salvage value of $40,000 at the end of that time. Amato uses the straight-line method for depreciation. 2. The note payable is a one-year note given to the bank January 31 and bearing interest at 10%. Interest is calculated on a monthly basis. 3. Late in December 2020, the theater sold 350 coupon ticket books at $50 each. Two hundred of these ticket books have been used by year-end. The cash received was recorded as Unearned Service Revenue. 4. Advertising paid in advance was $6,000 and was debited to Prepaid Advertising. The company has used $2,500 of the advertising as of December 31, 2020. 5. Salaries and wages accrued but unpaid at December 31, 2020, were $3,500. Instructions a. Compute the percentage change in sales, operating profit, net cash flow less capital expenditures, and net earnings from year to year for the years presented. b. Evaluate Kellogg's performance. Which trend seems most favorable? Which trend seems least favorable? What are the implications of these trends for Kellogg's sustainable performance objec- tives? Explain Accounting, Analysis, and Principles The Amato Theater is nearing the end of the year and is preparing for a meeting with its bankers to discuss the renewal of a loan. The accounts listed below appeared in the December 31, 2020, trial balance. Debit Credit $ 6,000 192,000 Prepaid Advertising Equipment Accumulated Depreciation-Equipment Notes Payable Unearned Service Revenue Ticket Revenue Advertising Expense Salaries and Wages Expense Interest Expense $ 60,000 90,000 17,500 360,000 18,680 67,600 1,400 Additional information is available as follows. 1. The equipment has an estimated useful life of 16 years and a salvage value of $40,000 at the end of that time. Amato uses the straight-line method for depreciation. 2. The note payable is a one-year note given to the bank January 31 and bearing interest at 10%. Interest is calculated on a monthly basis. 3. Late in December 2020, the theater sold 350 coupon ticket books at $50 each. Two hundred of these ticket books have been used by year-end. The cash received was recorded as Unearned Service Revenue. 4. Advertising paid in advance was $6,000 and was debited to Prepaid Advertising. The company has used $2,500 of the advertising as of December 31, 2020. 5. Salaries and wages accrued but unpaid at December 31, 2020, were $3,500
