Cango Week 3

Topics: Balance sheet, Generally Accepted Accounting Principles, Asset Pages: 4 (693 words) Published: August 3, 2012
Assumptions:
1. At the beginning of 2009, CanGo purchased the online gaming company. This purchase was for cash, paid for through the proceeds of the IPO and results in goodwill.  
2. 90% of the online book sales comes from JIT, the other 10% through the inventory which CanGo possesses. 100% of the CD/DVD/MP3 come through CanGo inventory. The result is that 80% of ALL sales is JIT and 20% is inventory.  

3. There is one warehouse for shipping of books and one plant for manufacturing.  
4. There are three divisions: a CD/DVD/MP3 division, an online gaming division and a books division. All manufacturing takes place in the CD/DVD/MP3 division.  
5. The IPO took place at the beginning of 2009.
 
6. The CD/DVDs were customized beginning in 2008. The MP3 players were built beginning in the start of 2009.  
7. The online gaming company was purchased for $30,000,000 and both Elizabeth and Andrew initiated the process.  
8. The company began in 2006, has a VC infusion in 2007 and 2008. It showed a profit in 2008 and 2009. Its only profitable division is the online book sales division.  
9. It has some type of international operations, hence the need for a "translation gain or loss" in owner's equity.  
10. It has an extraordinary loss from fire and a sale of a segment of its business in 2009.

Balance Sheet
ASSETS| December 31, 2009|  |
Cash| $20,900,000|  |
Marketable Securities| $117,000,000|  |
Accounts Receivable| $33,000,000|  |
Less: Allowance for Bad Debts| $(880,000)|  |
Net Accounts Receivable| $32,120,000|  |
 |  |  |
Inventory|  |  |
Raw Materials| $2,000,000|  |
Work-in-process| $1,000,000|  |
Finished Goods| $5,000,000|  |
Inventory Purchased for Resale| $24,000,000|  |
Total Inventory| $32,000,000|  |
 |  |  |
Plant, Property and Equipment| $6,700,000|  |
Less: Accumulated Depreciation| $(320,000)|  |
Net Plant, Property and Equipment...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Essay about Cango Week 3 Personal
  • Cango Week 3 4 Analysis Essay
  • Essay on Cango Week 3 Financial Analysis
  • MAT540 Week 3 Homework Essay
  • Cango Research Paper
  • Cango Week 3&4 Essay
  • Cango Week 3 & 4 Video Analysis Essay
  • EDU 390 Week 1 to 3 Essay

Become a StudyMode Member

Sign Up - It's Free