P3-9 Grow Company The following is a balance sheet for Grow Co. as of December 31, 2004: Grow Co. Balance Sheet December 31,2004 (amounts in millions) Assets Liabilities and Equities Cash Accounts receivable Inventories Prepaid expenses 13.5 70.7 84.3 9.3 Accounts payable Wages payable interest payable Other accrued expenses 38.3 7.7 24.0 Total currert assets $177.8 Taxes payabloe Total current liabilities Other liabilities: Senior deb Subordinated debt S 75.3 Land Buildings $ 3.7 49,8 57.6 Machinery Accumulated depreciation Other assets $ 31.0 49.4 41.6 $122.0 $ 11.3 502) Other long-term liabilities $ 80.9 S 18.6 S277.3 Preferred stock Common stock APIC Retained earnings Shareholders' equity Total assets 50.4 17.2 80.0 Total liabilities & shareholders' equity $2775 The following information pertains to 2005 (all amounts are in millions): a. Sales were $501.7, all on account. b. Collections on accounts receivable were $489.8. c. The cost of goods sold was $337.2. d. Depreciation expense was $10.5. e. Cash spent on research and development was $5.7 f. Tax expense was $7 8 Taxes payable at year-end were $5.7 h. Interest expensc was $15.9 i. Other cash expenses were $21.7.The other expenses are classified as selling, general, and administrative (SG&A) expenses on the income statement. j. A senior debt issue raised $47.3. k. Dividends paid totaled $16.7 L Wages expense (all SG&A) was $92. m. Unpaid wages at the end of the year were $6.9 n. Interest paid to creditors was $13.9. o. Other assets purchased for cash totaled $9.3. p. Land purchased for cash cost $0.5. q. A building was sold for $1.9 in cash. The building cost Grow $6.0 and had accumu- lated depreciation of $4.1. r. Purchases were $348.1, all on account. s. Payments on accounts payable were $336.7 t. Purchased a building for $10.5 u. Purchased machinery for $11.7 v. Expirations of prepaid items totaled $6. Prepaids are related to selling, general, and administrative expense accounts. w. Additions to prepaids totaled $8.1. x. Other accrued expenses at the end of the year, all relating to selling, general, and ad ministrative expenses, totaled $29.3. Requirea a. In a set of T-accounts, make all entries required under U.S. GAAP b. Prepare a balance sheet for Grow as of December 31,2005. c. Prepare an income statement for Grow for the year ended December 31, 2005 P3-9 Grow Company The following is a balance sheet for Grow Co. as of December 31, 2004: Grow Co. Balance Sheet December 31,2004 (amounts in millions) Assets Liabilities and Equities Cash Accounts receivable Inventories Prepaid expenses 13.5 70.7 84.3 9.3 Accounts payable Wages payable interest payable Other accrued expenses 38.3 7.7 24.0 Total currert assets $177.8 Taxes payabloe Total current liabilities Other liabilities: Senior deb Subordinated debt S 75.3 Land Buildings $ 3.7 49,8 57.6 Machinery Accumulated depreciation Other assets $ 31.0 49.4 41.6 $122.0 $ 11.3 502) Other long-term liabilities $ 80.9 S 18.6 S277.3 Preferred stock Common stock APIC Retained earnings Shareholders' equity Total assets 50.4 17.2 80.0 Total liabilities & shareholders' equity $2775 The following information pertains to 2005 (all amounts are in millions): a. Sales were $501.7, all on account. b. Collections on accounts receivable were $489.8. c. The cost of goods sold was $337.2. d. Depreciation expense was $10.5. e. Cash spent on research and development was $5.7 f. Tax expense was $7 8 Taxes payable at year-end were $5.7 h. Interest expensc was $15.9 i. Other cash expenses were $21.7.The other expenses are classified as selling, general, and administrative (SG&A) expenses on the income statement. j. A senior debt issue raised $47.3. k. Dividends paid totaled $16.7 L Wages expense (all SG&A) was $92. m. Unpaid wages at the end of the year were $6.9 n. Interest paid to creditors was $13.9. o. Other assets purchased for cash totaled $9.3. p. Land purchased for cash cost $0.5. q. A building was sold for $1.9 in cash. The building cost Grow $6.0 and had accumu- lated depreciation of $4.1. r. Purchases were $348.1, all on account. s. Payments on accounts payable were $336.7 t. Purchased a building for $10.5 u. Purchased machinery for $11.7 v. Expirations of prepaid items totaled $6. Prepaids are related to selling, general, and administrative expense accounts. w. Additions to prepaids totaled $8.1. x. Other accrued expenses at the end of the year, all relating to selling, general, and ad ministrative expenses, totaled $29.3. Requirea a. In a set of T-accounts, make all entries required under U.S. GAAP b. Prepare a balance sheet for Grow as of December 31,2005. c. Prepare an income statement for Grow for the year ended December 31, 2005