(IV) Annual Report Exercise - Child World Iced Teached) Child Work, Inc markets toys and other child merchandise hochsche of low margin, self-service stores. Operating under theme of Child World Children's Palace the company's stores are in 25 different states the following questions using the attached income statement and balance sheet 1 Total Assets of Child World of December 31, Year 2-3 What is Child World's gross profit margia for the year ended Dec 31, Yeu 27 2 What is the amount paid by Child World for services, that have not yet been used or received at December 31, Year 2? Child World has 5228.615 in current assets. How are assets categorized as "current"? 5 Why does the "Accrued income taxes on the balance sheet not equal the Provision for income taxes on the income statement 6 Are Child World's fixed at ly new or fairly old? Why do you think o Assuming NO property and quictwo disposed of during Year 2. what was the cost of property and equipment parlsed during the year? If Child World decided that their large inventory of plastic dolls was obsolete and threw them away, how would this affect the following items? (Answer: Increase Decrease, or Noche Total Assets Total Liabilities Total Shareholder's Equity Net Income Net Cash flow 9 During the year the following events occurred. Record the journal entries. Make up suitable account names as required for the journal entries and label whether the item is a balance sheet (B/S) or income statement (1/S) item. If no entry is required state no entry." June 1/Year 2. Child World signed a $4.000 contract with a construction firm to have the leaky roof of one of its stores repaired. b. June S/Year 2. Child World made an $800 down payment on the roof repairs. June 25/Year 2. Roof repairs are completed and invoiced d. August 1/Year 2. Child World paid the balance owed for the roof repair. 10 At the fiscal Year 2 average rate of sales how long would it take for Child World to sell its existing inventory? Circle one and show you work 0 to 10 wecks 10 to 15 weeks 15 to 20 weeks 20 to 25 weeks More than 25 weeks ? Chill World Consolidated Statements of Income 1$ in landharp pris! YEAR 2 YEAR 1 Net Sales $628,834 $513.145 Costs and Expenses: Cost of goods sold 438.946 355,536 Operating expenses 148,282 119.862 Depreciation and amortization 11,355 10.174 Total Operating Expenses 598,583 485,575 Income (Loss) from Operations. 30, 251 27,573 Interest: Interest on obligations under capital leases 2,596 2.537 Interest expense.. 2,580 5,045 Interest income (937) (514) Total Interest Expense, net 4,239 6.771 Income (Loss) before Income Taxes 26,012 20.802 Provision (Benefit) for Income Taxes 15,063 11.434 Net Income (Loss).... $ 10,949 $9.368 3 .95 $ Earnings per Share........ 91 The menyings to consolidated financial statements an integral part of the stars Child Wildline Consolidated Balance Sheets (5 in the per share fierest DECEMBER 31 YEAR 2 YEAR 1 $ 13,467 1,655 178,837 4.626 228,615 $ 22.325 2056 11.183 3.99 169,193 5,600 35.968 17.055 58,626 (12668 15.95 28,575 5.63 5.839 26.49 13.059 *5.376 16.5631 38.813 31,983 578 76,087 78 LOT ASSETS Current Assets: Cash and temporary cash investments Accounts receivable Inventories.. Prepaid expenses.. Total Current Assets Property and Equipment, at cost: Land and buildings Furniture, fixtures and equipment. Leasehold improvements. Less - accumulated depreciation and amortization Total Property and Equipment, net Leased Property Under Capital Leases, net Other Assets .. Cost in Excess of Net Assets of Purchased Business, net of acumulated amortization of 54,713 and $2.683, respectively Total Assets.. LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Current portion of long-term debt Current portion of capital lease obligations Accounts payable Accrued liabilities Accrued income taxes. Total Current Liabilities Long-Term Debt, less current portion.. Capital Lease Obligations, less current portion Deferred Income Taxes. Stockholders Equity: Preferred stock - pur value $1.00 per share, authorized 5,000,000 shares, no shares issued Common stock - par value $. 10 per share, authorized 25,000,000 shares; issued and outstanding 11.500,000 shares Capital surplus Retained earnings Total Stockholders' Equity . Total Liabilities and Stockholders' Equity 3 400 1.935 199,40 28.069 6,992 166,836 5,500 94.945 1.689 $ 100 L769 87 516 20.572 5. ISS 115.962 5.00 ISO 15 109 1.150 158, 781 21. SZ 151. SOS ISO 078 SIS The companying nutes to ensuited financial statements are intre part dhe ne shte (IV) Annual Report Exercise - Child World Iced Teached) Child Work, Inc markets toys and other child merchandise hochsche of low margin, self-service stores. Operating under theme of Child World Children's Palace the company's stores are in 25 different states the following questions using the attached income statement and balance sheet 1 Total Assets of Child World of December 31, Year 2-3 What is Child World's gross profit margia for the year ended Dec 31, Yeu 27 2 What is the amount paid by Child World for services, that have not yet been used or received at December 31, Year 2? Child World has 5228.615 in current assets. How are assets categorized as "current"? 5 Why does the "Accrued income taxes on the balance sheet not equal the Provision for income taxes on the income statement 6 Are Child World's fixed at ly new or fairly old? Why do you think o Assuming NO property and quictwo disposed of during Year 2. what was the cost of property and equipment parlsed during the year? If Child World decided that their large inventory of plastic dolls was obsolete and threw them away, how would this affect the following items? (Answer: Increase Decrease, or Noche Total Assets Total Liabilities Total Shareholder's Equity Net Income Net Cash flow 9 During the year the following events occurred. Record the journal entries. Make up suitable account names as required for the journal entries and label whether the item is a balance sheet (B/S) or income statement (1/S) item. If no entry is required state no entry." June 1/Year 2. Child World signed a $4.000 contract with a construction firm to have the leaky roof of one of its stores repaired. b. June S/Year 2. Child World made an $800 down payment on the roof repairs. June 25/Year 2. Roof repairs are completed and invoiced d. August 1/Year 2. Child World paid the balance owed for the roof repair. 10 At the fiscal Year 2 average rate of sales how long would it take for Child World to sell its existing inventory? Circle one and show you work 0 to 10 wecks 10 to 15 weeks 15 to 20 weeks 20 to 25 weeks More than 25 weeks ? Chill World Consolidated Statements of Income 1$ in landharp pris! YEAR 2 YEAR 1 Net Sales $628,834 $513.145 Costs and Expenses: Cost of goods sold 438.946 355,536 Operating expenses 148,282 119.862 Depreciation and amortization 11,355 10.174 Total Operating Expenses 598,583 485,575 Income (Loss) from Operations. 30, 251 27,573 Interest: Interest on obligations under capital leases 2,596 2.537 Interest expense.. 2,580 5,045 Interest income (937) (514) Total Interest Expense, net 4,239 6.771 Income (Loss) before Income Taxes 26,012 20.802 Provision (Benefit) for Income Taxes 15,063 11.434 Net Income (Loss).... $ 10,949 $9.368 3 .95 $ Earnings per Share........ 91 The menyings to consolidated financial statements an integral part of the stars Child Wildline Consolidated Balance Sheets (5 in the per share fierest DECEMBER 31 YEAR 2 YEAR 1 $ 13,467 1,655 178,837 4.626 228,615 $ 22.325 2056 11.183 3.99 169,193 5,600 35.968 17.055 58,626 (12668 15.95 28,575 5.63 5.839 26.49 13.059 *5.376 16.5631 38.813 31,983 578 76,087 78 LOT ASSETS Current Assets: Cash and temporary cash investments Accounts receivable Inventories.. Prepaid expenses.. Total Current Assets Property and Equipment, at cost: Land and buildings Furniture, fixtures and equipment. Leasehold improvements. Less - accumulated depreciation and amortization Total Property and Equipment, net Leased Property Under Capital Leases, net Other Assets .. Cost in Excess of Net Assets of Purchased Business, net of acumulated amortization of 54,713 and $2.683, respectively Total Assets.. LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Current portion of long-term debt Current portion of capital lease obligations Accounts payable Accrued liabilities Accrued income taxes. Total Current Liabilities Long-Term Debt, less current portion.. Capital Lease Obligations, less current portion Deferred Income Taxes. Stockholders Equity: Preferred stock - pur value $1.00 per share, authorized 5,000,000 shares, no shares issued Common stock - par value $. 10 per share, authorized 25,000,000 shares; issued and outstanding 11.500,000 shares Capital surplus Retained earnings Total Stockholders' Equity . Total Liabilities and Stockholders' Equity 3 400 1.935 199,40 28.069 6,992 166,836 5,500 94.945 1.689 $ 100 L769 87 516 20.572 5. ISS 115.962 5.00 ISO 15 109 1.150 158, 781 21. SZ 151. SOS ISO 078 SIS The companying nutes to ensuited financial statements are intre part dhe ne shte