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Complete P3-4 (pages 148149) and CP3-2 (page 155) from Chapter 3 of your Financial Accounting textbook. Please see attachments

U02A1 Financial Performance Analysis CP3-2 Finding Financial Information LO3-2, 3-4, 3-6 Refer to the financial statements of Urban Outfitters in Appendix C at the end of the book. Required: 1. What is the company's revenue recognition policy? (Hint: Look in the notes to the financial statements.) 2. Assuming that $50 million of cost of sales was due to noninventory purchase expenses (distribution and occupancy costs), how much inventory did the company buy during the year? (Hint: Use a T-account of inventory to infer how much was purchased.) INVENTORY (in thousands) Inventory purchased during the year: 3. Calculate selling, general, and administrative expenses as a percent of sales for each year presented. (Dollars in thousands.) Year Ended 2012 2011 2010 SG&A Expenses / Net Sales Revenue = Percentage By what percent did these expenses increase or decrease from fiscal years ended 2011 and 2012 and between 2010 and 2011? (Hint: Percentage Change = [Current Year Amount Prior Year Amount]/Prior Year Amount.) % Change Incr. or Decr. Between years ended 2011 and 2012: Between years ended 2010 and 2011: 4. Compute the company's net profit margin for each year presented. (Dollars in thousands.) Fiscal Year Ended Net Income / Net Sales (or Operating) Revenues = Net Profit Margin Ratio 2012 7.5% 2011 2010 Fiscal Year Ended 2012 2011 2010 Net Income / Net Sales (or Operating) Revenues = Net Profit Margin Ratio Explain net profit margin ratio and discuss the results shown above. CP3-4 P3-4 Analyzing the Effects of Transactions Using T-Accounts, Preparing an Income Statement, and Evaluating the Net Profit Margin Ratio as a Manager LO3-4, 3-5, 3-6 Kaylee James, a connoisseur of fine chocolate, opened Kaylee's Sweets in Collegetown on February 1, 2014. The shop specializes in a selection of gourmet chocolate candies and a line of gourmet ice cream. You have been hired as manager. Your duties include maintaining the store's financial records. The following transactions occurred in February 2014, the first month of operations. A. Received four shareholders' contributions totaling $30,200 cash to form the corporation; issued 400 shares of $.10 par value common stock. B. Paid three months' rent for the store at $1,750 per month (recorded as prepaid expenses). C. Purchased and received candy for $6,000 on account, due in 60 days. D. Purchased supplies for $1,560 cash. E. Negotiated and signed a two-year $11,000 loan at the bank. F. Used the money from (e) to purchase a computer for $2,750 (for recordkeeping and inventory tracking); used the balance for furniture and fixtures for the store. G. Placed a grand opening advertisement in the local paper for $400 cash; the ad ran in the current month. H. Made sales on Valentine's Day totaling $3,500; $2,675 was in cash and the rest on accounts receivable. The cost of the candy sold was $1,600. I. Made a $550 payment on accounts payable. J. Incurred and paid employee wages of $1,300. K. Collected accounts receivable of $600 from customers. L. Made a repair to one of the display cases for $400 cash. M. Made cash sales of $1,200 during the rest of the month. The cost of the candy sold was $600. Required: 1&2 Record in the T-accounts the effects of each transaction for Kaylee's Sweets in February, referencing each transaction in the accounts with the transaction letter. Show the ending balances in the T-accounts. An example amount has been posted to the Cash T-Account from transaction (l). Cash Accounts Receivable Beg. bal. Beg. bal. 400 (l) End. bal. End. bal. Supplies Inventory Beg. bal. Beg. bal. End. bal. End. bal. Prepaid Expenses Equipment Beg. bal. Beg. bal. End. bal. End. bal. Furniture and Fixtures Beg. bal. Accounts Payable Beg. bal. End. bal. End. bal. Notes Payable Common Stock Beg. bal. Beg. bal. End. bal. End. bal. Additional Paid-in Capital Sales Revenue Beg. bal. Beg. bal. End. bal. End. bal. Cost of Goods Sold Beg. bal. Repair Expense Beg. bal. End. bal. End. bal. Advertising Expense Beg. bal. Wage Expense Beg. bal. End. bal. End. bal. Required: 3. Prepare an income statement at the end of the month ended February 28, 2014. KAYLEE'S SWEETS Income Statement (unadjusted) For the Month Ended February 28, 2014 Revenues: Expenses: Total cost and expenses Net income 0 $400 Required: 5. After three years in business, you are being evaluated for a promotion. One measure is how effectively you managed the sales and expenses of the business. The following data are available: Total assets Total liabilities Total stockholders' equity Net sale revenue Net income 2016* $ 88,000 49,500 38,500 93,500 22,000 2015 $ 58,500 22,000 36,500 82,500 11,000 2014 $ 52,500 18,500 34,000 55,000 4,400 At the end of 2016, Kaylee decided to open a second store, requiring loans and inventory purchases prior to the store's opening in early 2017. 5-a. Calculate the net profit margin ratio for each year. (Round your answers to 1 decimal place.) Net Profit Margin Ratio 2016 2015 2014 % % % 5-b. Do you think you should be promoted? Yes No U02A2 Adjusting Entries P4-7 Recording Adjusting and Closing Entries and Preparing a Balance Sheet and Income Statement Including Earnings per Share L04-1, 4-2, 4-4. Tnstall, Inc, a small service company, keeps its records without the help of an accountant. After much effort, an outside accountant prepared the following adjusted trial balance as of the end ogf the annual accounting period, December 31, 2014: Account Titles Cash Accounts receivable Supplies Prepaid insurance Service trucks Debit $ 42,000 11,60 0 90 0 80 0 19,00 0 Accumulated depreciation Other assets 8,30 0 Accounts payable Credit $ 9,200 3,00 0 Wages payable Income taxes payable Note payable (3 years; 10% interest due each December 31) Common stock (5,000 shares outstanding) Additional paid-in capital Retained earnings Service revenue Remaining expenses (not detailed; excludes income tax) 33,36 0 17,0 00 40 0 19,0 00 6,00 0 61,3 60 Income tax expense Totals $ 115,960 $ 115,960 Data not yet recorded included: A. B. C. D. E. The supplier count on December 31, 2014, reflected $300 remaining supplies on hand to be used in 2015. Insureance expired during 2014, $800 Depreciation expense for 2014 $3,700. Wages earned by emoloyees not yet paid on December 31, 2014 $640 Income Tas expense, $5,540 Required: 1 Record the 2014 adjusting entries (If no entry is required for a transaction/event select \"No Journal Entry required\" in the first account field Transaction a. b. c. d. e. Required: General Journal Debit Credit 2-a. Prepare an income statement that includes the effects of the preceeding five transactions (Round \"Earnings per share to 2 decimal places): TUNSTALL, INC. Income Statement For the Year Ended December 31, 2014 Operating revenue: Operating expenses: Total expenses Earnings per share Required: - 2-b: Prepare a classified balance sheet that included the effects of the preceedinf five transactions (Amounts to be deducted should be indicated by a minus sign) TUNSTALL, INC. Balance Sheet At December 31, 2014 Assets Liabilities and Stockholders' Equity Current assets: Total current assets Current liabilities: - Total current liabilities Total liabilities - - Stockholders' equity: Total stockholders' equity Total assets $ - Requirement 3: Record the 2014 closing entry Total liabilities and stockholders' equity $ - (If no entry is required for a transaction/event, select \"No Journal Entry required\" in the first account field) Transaction General Journal Debit 1 P4-7 Check Figures 2-a. Prepare an income statement that includes the effects of the preceding five transactions. Credit (Round "Earnings per share" to 2 decimal places.) TUNSTALL, INC. Income Statement For the Year Ended December 31, 2014 Operating revenue: Operating expenses: Total expenses Net income - $16,720 Earnings per share U02A2 CP4-2 Finding Financial information L04-2, 4-3, 4-4 Refer to the financial statement of Urban Outfitters in Appendix C at the end of this book. Requires: 1.How much is in the Prepaid Expenses and other current Assets accounts at the end of the most recent year for the year ended January 31, 2012? (in thousands) Where did you find this information? 2. What did the company report for Deferred Rent and Other Liabilities at the end of the most recent year (for the year ended January 31, 2014? (in thousands) Where did you find this information? 3. What is the difference between prepaid rent and deferred rent? 4. Describe in general terms what accrued liabilities are. Accrued Liabilities would consist of costs that have been incurred by the end of the accounting period but which have not yet been paid. 5. What would generate the interest income that is reported on the income statement? 6. What company accounts would not have balances on a post-closing trial balance? 7. Describe the closing entry, if any, for Prepaid Expenses. 8. What is the company's earnings per share (basic only) for the three years reported? Year Ended: EPS: January 31, 2012 January 31, 2011 January 31, 2010 9. Compute the company's total asset turnover ratio for the three years reported. (Dollars in thousands.) Fiscal Year Sales Average Total = Total Asset Ended Revenue / Assets Turnover 1/31/2012 1/31/2011 1/31/2010 What does the trend suggest to you about Urban Outfitters