Sloboat Case Study

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Sloboat Case Study
March 7, 2013
Capstone Seminar
Sean McNamara, Matthew Sylvia, Michael Regghetio

Analysis of Sloboat Case Study

In this case we take on the role of Rick Craner, the financial accountant for Sloboat Shipping Inc. Rick is faced with compiling, organizing, and evaluating the company’s financial activity for the 2012 fiscal year. We are provided with several notes on Sloboat financial transactions, and we are tasked with sorting through these transactions to provide a suitable evaluation and presentation of Sloboat’s financial standings at the end of the 2012 fiscal year.

It is important to look at all of the transactions described in the case study before moving forward. The case study broke down these transactions into “financing” and “investing”. The following are transactions that occurred under “financing”: * 7% bonds payable issued on November 1, 2010

* Bonds pay interest semi-annually on May 1st and November 1st * Market interest rate on the date of issuance had been 8% * SSI decided to retire 50% of the 7% bonds on August 1, 2011 * Additional 30,000 common shares issued on June 14, 2011 * Common dividend of $0.15 per common share on December 1, 2011 with date of record of December 5th and distribution on December 20th The following are transactions that occurred under “investing”: * SSI owned 250, 7.5% bonds of “OnCap Financial”, purchased in late fiscal 2011, bonds paid interest on March 1st and September 1st and set to mature on March 1, 2014. On January 31, 2012, the market decreased to 5% and SSI sold all the outstanding bonds. * SSI owned 20,000 shares in Lowland Resources. On October 2, 2011 SSI received a 5% stock dividend. Each share was trading at $22.62. On December 15, 2011 SSI decided to sell 60% of its holdings (12,000 stocks). SSI paid a $400 brokerage fee. On February 29, 2012, the remaining shares were trading at Statement of Financial Position|

As at February 28, 2011|
| | | | |
ASSETS| | | | |
Current Assets:| | | | |
Cash| $| 12,736 | |
Bond Investing Recievable| | 9,375 | |
Trading Investment-Stocks| | 468,600 | |
Trading Investments-Bonds| | 260,156 | |
Inventory| | 47,987 |  |
| | | | 798,854 |
Property, Plant, and Equipment| | 742,108 |  |
| | | | 742,108 |
Total Assets| | | | 1,540,962 |
| | | | |
| | | | |
| | | | |
Liablities & Shareholder's Equity| | | |
Liabilities| | | | |
Current liabilities:| | | | |
Bond interest payable| $| 23,333 | |
Dividends payable| | 11,250 |  |
| | | | 34,583 |
| | | | |
Long-term liabilities:| | | | |
7% Bonds Payable(1,000 bonds; mautres 11/1/15)| | 961,694 |  | | | | | 961,694 |
Total Liabilities| | | | 996,277 |
| | | | |
| | | | |
Shareholders' equity| | | | |
$2.25 cumlative, non-convertible preferred stock| | 37,500 | | 150,000 authorized; 5,000 outstanding| | | |
Common stock| | 253,000 | |
500,000 authorized; 20,000 outstanding| | | | Stock dividend to be distributed| | 15,430 | |
Retained earnings| | 238,755 |  |
Total Shareholders' equity| | | 544,685 |
| | | | |
Total liabilities and Shareholders' equity | | | $1,540,962 | | | | | |
Cash Reciepts and Disbursements|
For Fiscal 2012|
| | | | |
Cash Reciepts| | | | |
Common Shares| $| 610,500 | |
Bond Investment| | 18,750 | |
| | | |
Trading investing - Bonds| | 272,331 | |
Trading investing - Stocks| | 268,610 | |
Total| | $| 1,170,191 | |
| | | | |
| | | | |
Cash Disbursements| | | | |
7% Bonds Payable| $| 528,517 | |
Bond interest| | 52,500 | |
Dividends| | 30,150 | |
Total| | $|...
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