Anthony Case 3-2 and 11-2

Topics: Income statement, Generally Accepted Accounting Principles, Accounts receivable Pages: 2 (326 words) Published: November 16, 2010
Anthony Cases 3-2, 11-2, and Problem 5-7

Anthony Cases 3-2: Loan Pine Café (B)
1. Below is the income statement for the Lone Pine Café from November 2, 2005-March 30, 2006. [pic]
*Notes regarding two calculations:
a. Sales = $43,480 (cash) + $870 (accounts receivable) = $44, 350 b. Inventory (food & beverage) = $10,016 (purchase from suppliers) + $1,583 (accounts payable) + $370 (which is the change from inventory of $2800-$2430) = $11,969. 2. This income statement communicates to Mrs. Antoine that during this accounting period for operating the business, the business had a net loss. This resulted as the business expenses grossly exceeded the total sales revenues. Since the income statement and the balance sheet are said to articulate with one another, this income statement also validates the loss in cash during the same operating period found on the balance sheet. Therefore, in order for Mrs. Antoine to continue to operate her business, not only must she shore up her dissolved partnership and payoff the bank loan and accounts payable suppliers, but she must also find a way to lesson her expenses and generate more sales – therefore, providing her a positive net income.

Anthony Case 11-2: Amerbran Company (A)
1. Below is the state of cash flows for Amerbran Company for the year ended December 31, 20x1. (Please see in the following examples: the balance sheet with net change and then the cash flow statement). [pic]


Anthony Problem 5-7
a. Quick & Current Ratios are found below:

Current Ratio = Current assets/Current liabilities = $125,200/$71,300 = 1.76 Quick Ratio = Monetary current assets/Current liabilities = ($23,100 + 32,800)/$71,300 = 0.78 b.) Number of days’ cash on hand:

Days’ cash = Cash/(Total cash expenses/365) = $23,100/($231,000/365) = 36.5...
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