The following information relating to Mesa Rock, Inc. was taken from the adjusted trial balances of the

year just ended and the prior year.

Accounts Current Year Prior Year

Accounts Payable $1,500,000 $2,500,000

Accounts Receivable 1,753,000 1,940,000

Accumulated Depreciation - Building 4,000,000 3,000,000

Accumulated Depreciation Equip. 1,150,000 900,000

Administrative Salary Expense 4,700,000 3,774,000

Administrative Supply Expense 499,000 450,000

Advertising Expense 2,212,000 2,331,000

Allowance for Uncollectible Accounts 53,000 40,000

Amortization Expense($200,000 - Franchise & $300,000 - Patents) 500,000 500,000

Uncollectible Account Expense 42,000 47,000

Bonds Payable 14,000,000 19,500,000

Building 29,000,000 28,987,000

Cash 2,750,000 6,204,000

Common Stock, $10 Par value, 2,000,000 Shares Authorized, 1,200,000

Shares Issued 12,000,000 12,000,000

Delivery Expense (to our customers) 3,036,000 3,000,000

Depreciation Expense - Building 1,000,000 1,000,00

Depreciation Expense Equipment* 250,000 250,000

Dividends Declared ($400,000 to P/S & remainder to C/S) 8,050,000 6,000,000

Dividends Payable 1,000,000 0

Equipment 15,000,000 14,964,000

Freight-in 812,000 906,000

Franchise, net 3,100,000 3,300,000

Income Tax Expense (see note 1) 30% 30%

Insurance Expense* 200,000 200,000

Interest Expense 1,748,000 1,600,000

Inventory, beginning 5,150,000 4,400,000

Inventory, ending 4,200,000 5,150,000

Investment in Regor Inc. Common Stock (controlling interest) 5,000,000 0

Land (currently in use ) 1,300,000 1,300,000

Land (held for future use) 500,000 0

Mortgage Payable ($2,000,000 current) 12,400,000 14,400,000

Paid in Capital in Excess of Par Value, Common Stock 700,000 700,000

Paid in Capital in Excess of Par Value, Preferred Stock 500,000 0

Patents, net 1,100,000 1,400,000

Preferred Stock, $10 Par Value, 8%, 800,000 Shares Authorized, and

500,000 Issued and Outstanding 5,000,000 0

Premium on Bonds Payable 573,000 573,000

Prepaid Expenses 750,000 700,000

Purchases 56,477,000 57,736,000

Purchase Discounts 1,128,000 618,000

Rent Expense* 1,000,000 1,000,000

Retained Earnings, Beginning Balance 6,007,000 1,997,000

Sales Revenue 95,587,000 92,902,000

Sales Discounts 140,000 188,000

Sales Returns and Allowances 312,000 303,000

Sales Salary Expense 4,555,000 3,307,000

Sales Supply Expense 712,000 688,000

Supply Inventory 500,000 490,000

Treasury Stock, (35,000 Shares) 750,000 0

Unearned Revenues 500,000 525,000

Utility Expense* 3,200,000 2,690,000

Additional Information:

* The Companys policy on Income Tax Expense is to pay the full amount when due on March 15 of the following year. Since it was not been paid in the year incurred, it is classified on the Balance Sheet an Income Tax Payable.

* Round to the nearest dollar.

* The year-end market price per share of common stock is $38 for the current year.

* *Depreciation on Equipment, Rent, Insurance, and Utility Expense are allocated 80% to Selling and 20% to General and Administrative.

* The companys policy is to use four classifications of expenses on the Income Statement Cost of Goods Sold, Selling, General and Administrative, and Income Tax. General and Administrative catch all costs that do not clearly fit in the other classifications

* Requirements:

* Create a formal classified Income Statement for the current year (include earnings per share)

* Create a formal Statement of Retained Earnings for the current year.

* Create a formal classified Balance Sheet for the current year

* Create the above three statements for the prior year.

* Create a formal Statement of Cash Flows (Indirect Method)

* The preferred stock was issued to retire $5,500,000 of bonds. This was considered a non-cash financing activity. There were no other non-cash financing or investing activities

* In the current year the Company purchased Regor Stock, land for future use, building improvements, and office equipment.

* In the current year, the Company paid dividends, the current portion of the mortgage, and purchased treasury stock.

* Calculate all the ratios listed in Chapter 18 for the current year only.

* Prepare a horizontal analysis and a vertical analysis of the current years Income Statement and Balance Sheet.

Part 1 - Submit 1 Excel file through D2L by midnight on Wednesday, March 1st.

Tab 1 Data entry number will only be entered on this tab all other tabs will reference numbers to Tab 1 you can use the provided Excel file.

Tab 2 Income Statement (PY)

Tab 3 Statement of R/E (PY)

Tab 4 Balance Sheet (PY)

Tab 5 Income Statement (CY)

Tab 6 Statement of R/E (CY)

Tab 7 Balance Sheet (CY)

Tab 8 Cash Flow Statement

Part 2 - Submit 1 Excel file (with all 11 tabs) through D2L by midnight on Wednesday, March 8th.

Tab 9 Ratios

Tab 10 Income Statement Analysis

Tab 11 Balance Sheet Analysis