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The Panama Pajama Company began operations on January 1, 2015, and is now in its third year of operations. The adjusted trial balance as of

The Panama Pajama Company began operations on January 1, 2015, and is now in its third year of operations.
The adjusted trial balance as of December 31, 2018 appears below, along with prior year balance sheet data and some additional transaction data for 2018.
THE PANAMA PAJAMA COMPANY
Adjusted Trial Balance
12/31/18
2018 2017
Account Title Adjusted Trial Balance Balance Sheet Info
Debit Credit Debit Credit
Cash $ 138,000 $ 35,600
Accounts Receivable 12,000 11,000
Inventory 4,400 5,600
Office Equipment 26,000 20,000
Machinery & Tools 59,000 21,000
Accumulated DepreciationPlant Assets $ 8,600 6,000
Accounts Payable 12,200 9,800
Note PayableShort Term 10,000 15,500
Note PayableLong Term 33,000 -
Common Stock, $10 par 150,000 50,000
Retained Earnings 11,900 11,900
Dividends 1,000
Sales Revenue 31,700 -
Cost of Goods Sold 11,600
Rent Expense 2,000
Advertising Expense 800
Depreciation Expense 2,600
$ 257,400 $ 257,400
Transaction Data for 2018 (Note, these transactions were included in the trial balance numbers above.)
Cash paid for purchase of office equipment $ 6,000
Cash paid for purchase of tools 5,000
Acquisition of Machinery with Notes PayableLong-term 33,000
Cash payment of dividends 1,000
Cash receipt from issuance of 10,000 shares of common stock 100,000
Requirements: (See sheet tabs at bottom. Use each sheet for the following requirements.)
Use Excel Skills in completing these requirements. You must use formulas and functions, cell references, and professional formatting.
1. Prepare the Panama Pajama Company multi-step income statement for the year ended December 31, 2018. Include the EPS at the bottom.
Also include a vertical analysis column at the right and perform a vertical analysis of the income statement. (Use percentage format with 1 decimal place.)
2. Prepare the Panama Pajama Company balance sheet for December 31, 2018. Include a vertical analysis column at the right
and perform a vertical analysis of the balance sheet. (Use the percentage format with 1 decimal place.)
3. Prepare the Panama Pajama Company statement of cash flows for the year ended December 31, 2018. Use the indirect method.
4. Complete the analysis of the financial statements as directed on the Analysis sheet.
5. Answer the question regarding the differences between IFRS and GAAP on the IFRS Perspective sheet.

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