The Company started operations on January 1, 2018. The Company is currently a private company but has aspirations to go public in 2023. In as much as the Companys goal is to make profit, the Companys focus since inception has been to minimize tax liability. For this reason, the Company adopts the inventory and depreciation methods (below) as its strategy to minimize tax liability especially at its early stages of operations. The income tax rates from 2018 to 2020 were consistent (i.e., 25% of net income before taxes)

The Company adopts the periodic system of inventory as well as the last in first out (LIFO) inventory costing method. In 2018, the Company sold 108,785,000 units of animal feed. Additional details of the 2018 inventory activities are outlined below:

The inventory activity for 2019 is presented below. 158,627,000 units were sold in 2019. Net Income before taxes in 2019 was $350,056,000.

Depreciation The Company adopts the double declining method of depreciation. All assets were purchased on January 1, 2018 for $500,000,000.00. The useful life for all the assets is 10 years. The salvage value of all the assets is $5,000,000.

2018 Account Balances With the immediate termination of the Companys Chief Accountant, the Company is yet to locate the records for its 2018 financial statements. The Company was however able to locate information for most of the account balances for 2018 (below), and has suggested you use the data below to the extent it is applicable to your scope of work.

Requirement 1: Prepare the Income Statement, Balance Sheet, Cash Flow Statement and Statement of Retained Earnings for the Year Ended December 2018. Deliverables must be in Excel format, including all built-in formulas for calculations.

Requirement 2: Provide a performance analysis of the Companys operations from 2018 to 2020. Deliverables must include: (a) a word document memo or report of the results and interpretations of the performance analysis; and (b) Excel document showing any calculations (with built-in formulas) if applicable.

Requirement 3: The Company has been contemplating on focusing on accounting practices (specifically inventory costing and depreciation methods) that would maximize profits rather than minimizing tax liabilities. Perform an analysis to compare and determine profit maximation versus tax liability minimization strategies. Deliverables must include: (a) a word document memo or report of the results and interpretations of the analysis; and (b) Excel document showing any calculations (with built-in formulas) if applicable.

Period January 1 February 22 March 15 April 10 May 20 Activity Beg Inventory Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases June 1 July 17 August 11 September 15 October 21 November 19 December 21 Units 5,000,000.00 10,000,000.00 16,500,000.00 18,910,000.00 12,005,000.00 21,000,000.00 7,900,000.00 15,501,000.00 16,000,000.00 22,384,000.00 13,000,000.00 3,000,000.00 Cost $ 2.00000 $ 1.00000 $ 1.50000 $ 1.75000 $ 1.25000 $ 2.00000 $ 1.00000 $ 1.40000 $ 2.10000 $ 2.00000 $ 1.05000 $ 1.00000 Cost $ Activity Beg Inventory Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Period January 1 February 2 March 20 April 11 May 20 June 11 July 27 August 31 September 8 October 21 November 22 December 19 Units 52,415,000.00 7,000,000.00 26,900,000.00 15,790,000.00 22,005,000.00 21,000,000.00 18,100,000.00 11,555,000.00 16,987,000.00 19,380,000.00 17,510,000.00 16,300,000.00 $ $ $ $ $ $ $ 1.53293 1.10000 1.50000 1.75000 1.25000 2.00000 2.00000 1.40000 A A A A A A 2.10000 2.00000 1.05000 $ 1.00000 The inventory activity for 2020 is presented below. 146,200,000 units were sold in 2020. Net Income before taxes in 2020 was $371,010,000. $ $ $ $ $ Cost 1.48755 1.00000 1.50000 Activity Beg Inventory Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Period January 1 February 10 March 7 April 10 May 17 June 19 July 1 August 21 September 19 October 12 November 29 December 1 Units 86,315.00 10,000.00 16,500.00 18,910.00 12,005.00 21,000.00 7,900.00 15,501.00 16,000.00 22, 13,000.00 3,000.00 $ $ $ 1.75000 1.25000 2.00000 1.95000 1.40000 2.10000 2.00000 2.05000 1.00000 $ $ $ $ Depreciation The Company adopts the double declining method of depreciation. All assets were purchased on January 1, 2018 for $500,000,000.00. The useful life for all the assets is 10 years. The salvage value of all the assets is $5,000,000. Financial Ratios The Company provided the following financial ratio information: 2019 2020 3.1 3.7 4.1 0.7 20.6 Ratio Current Ratio Quick Ratio Debt to Equity Ratio Times Interest Earned Ratio Return on Sales Ratio Asset Turnover Ratio Profit Margin Ratio Accounts Receivable Turnover Ratio Return on Assets Ratio 3.9 0.8 22.3 1.0 0.84 0.31 5.64 0.9 Industry 5.0 4.7 0.4 20.0 1.0 0.8 0.45 5.0 0.4 0.99 0.35 5.0 0.34 0.97 Account Net Cash Provided by Operating Activities Property, Plant & Equipment (PPE) Advertising Expense Accounts Receivable Salaries & Wages Payable Utilities Expense Interest Expense Accounts Payable Capital Stock Office Supplies Expense Retained Earnings Net Cash Used in Financing Activities Accumulated Depreciation Accounts Payable Prepaid Insurance Notes Payable - Long Term Property, Plant & Equipment Cash Net Sales (91% comprises of credit sales) Salaries & Wages Payable Depreciation Expense Income Taxes Net Cash Used in Investing Activities Salaries & Wages Expense Prepaid Insurance Accounts Receivable Balance in Thousands ('000) 1,440,304.00 500,000.00 3,000.00 236,522.00 32,465.00 7,550.00 10,250.00 37,400.00 650,800.00 9,500.00 310,418.30 257,000.00 100,000.00 206,125.00 20,200.00 249,547.00 500,000.00 85,205.00 756,512.00 25,000.00 100,000.00 72,648.15 345,000.00 156,500.00 26,920.00 65,900.00 Period December 31 December 31 December 31 December 31 December 31 December 31 December 31 January 1 December 31 December 31 January 1 December 31 December 31 December 31 January 1 December 31 January 1 January 1 December 31 January 1 December 31 December 31 December 31 December 31 December 31 January 1 Period January 1 February 22 March 15 April 10 May 20 Activity Beg Inventory Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases June 1 July 17 August 11 September 15 October 21 November 19 December 21 Units 5,000,000.00 10,000,000.00 16,500,000.00 18,910,000.00 12,005,000.00 21,000,000.00 7,900,000.00 15,501,000.00 16,000,000.00 22,384,000.00 13,000,000.00 3,000,000.00 Cost $ 2.00000 $ 1.00000 $ 1.50000 $ 1.75000 $ 1.25000 $ 2.00000 $ 1.00000 $ 1.40000 $ 2.10000 $ 2.00000 $ 1.05000 $ 1.00000 Cost $ Activity Beg Inventory Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Period January 1 February 2 March 20 April 11 May 20 June 11 July 27 August 31 September 8 October 21 November 22 December 19 Units 52,415,000.00 7,000,000.00 26,900,000.00 15,790,000.00 22,005,000.00 21,000,000.00 18,100,000.00 11,555,000.00 16,987,000.00 19,380,000.00 17,510,000.00 16,300,000.00 $ $ $ $ $ $ $ 1.53293 1.10000 1.50000 1.75000 1.25000 2.00000 2.00000 1.40000 A A A A A A 2.10000 2.00000 1.05000 $ 1.00000 The inventory activity for 2020 is presented below. 146,200,000 units were sold in 2020. Net Income before taxes in 2020 was $371,010,000. $ $ $ $ $ Cost 1.48755 1.00000 1.50000 Activity Beg Inventory Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Period January 1 February 10 March 7 April 10 May 17 June 19 July 1 August 21 September 19 October 12 November 29 December 1 Units 86,315.00 10,000.00 16,500.00 18,910.00 12,005.00 21,000.00 7,900.00 15,501.00 16,000.00 22, 13,000.00 3,000.00 $ $ $ 1.75000 1.25000 2.00000 1.95000 1.40000 2.10000 2.00000 2.05000 1.00000 $ $ $ $ Depreciation The Company adopts the double declining method of depreciation. All assets were purchased on January 1, 2018 for $500,000,000.00. The useful life for all the assets is 10 years. The salvage value of all the assets is $5,000,000. Financial Ratios The Company provided the following financial ratio information: 2019 2020 3.1 3.7 4.1 0.7 20.6 Ratio Current Ratio Quick Ratio Debt to Equity Ratio Times Interest Earned Ratio Return on Sales Ratio Asset Turnover Ratio Profit Margin Ratio Accounts Receivable Turnover Ratio Return on Assets Ratio 3.9 0.8 22.3 1.0 0.84 0.31 5.64 0.9 Industry 5.0 4.7 0.4 20.0 1.0 0.8 0.45 5.0 0.4 0.99 0.35 5.0 0.34 0.97 Account Net Cash Provided by Operating Activities Property, Plant & Equipment (PPE) Advertising Expense Accounts Receivable Salaries & Wages Payable Utilities Expense Interest Expense Accounts Payable Capital Stock Office Supplies Expense Retained Earnings Net Cash Used in Financing Activities Accumulated Depreciation Accounts Payable Prepaid Insurance Notes Payable - Long Term Property, Plant & Equipment Cash Net Sales (91% comprises of credit sales) Salaries & Wages Payable Depreciation Expense Income Taxes Net Cash Used in Investing Activities Salaries & Wages Expense Prepaid Insurance Accounts Receivable Balance in Thousands ('000) 1,440,304.00 500,000.00 3,000.00 236,522.00 32,465.00 7,550.00 10,250.00 37,400.00 650,800.00 9,500.00 310,418.30 257,000.00 100,000.00 206,125.00 20,200.00 249,547.00 500,000.00 85,205.00 756,512.00 25,000.00 100,000.00 72,648.15 345,000.00 156,500.00 26,920.00 65,900.00 Period December 31 December 31 December 31 December 31 December 31 December 31 December 31 January 1 December 31 December 31 January 1 December 31 December 31 December 31 January 1 December 31 January 1 January 1 December 31 January 1 December 31 December 31 December 31 December 31 December 31 January 1