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Assumptions Balance Sheet Income Statement Assumptions: 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. 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. There is one warehouse for shipping of books and one plant for manufacturing. 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. The IPO took place at the beginning of 2009. The CD/DVDs were customized beginning in 2008. The MP3 players were built beginning in the start of 2009. The online gaming company was purchased for $30,000,000 and both Elizabeth and Andrew initiated the process. 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. It has some type of international operations, hence the need for a "translation gain or loss" in owner's equity. 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 $6,380,000 Prepaid Expenses $200,000 Goodwill and Other Purchased Intangibles $28,000,000 Less: Amortization $(700,000) Net Goodwill and Other Purchased Intangibles $27,300,000 Total Assets $235,900,000 LIABILITIES AND OWNERS' EQUITY Accounts Payable $22,000,000 Accrued Advertising $11,800,000 Other Liabilities and Accrued Expense $1,400,000 Current Portion of Long-Term Debt $2,300,000 Long Term Debt $57,400,000 Preferred Stock, $100 par value per share, 100,000 authorized, 0 shares issued and outstanding $0 Common Stock, $1 par value per share, 250,000,000 shares authorized, 13,000,000 shares issued, 12,900,000 outstanding $13,000,000 Additional Paid-in-Capital in excess of par value, Common Stock $117,000,000 Treasury Stock $(1,000,000) Retained Earnings (less Cash Dividends Paid) $12,000,000 $11,000,000 Total Liabilities and Owner's Equity $235,900,000 -------------------------------------------------------------------------------- Income Statement December 31, 2009 December 31, 2008 Sales Revenues $51,000,000 $10,300,000 Less: Sales Returns $(1,000,000) $(300,000) Net Sales Revenues $50,000,000 $10,000,000 Less: Cost of Goods Sold $(9,000,000) $(4,000,000) Gross Profit $41,000,000 $6,000,000 Operating Expenses: Advertising and Sales $(26,000,000) $(3,000,000) Depreciation $(160,000) Salaries and Wages $(1,700,000) $(1,400,000) Product Development $(4,000,000) $(1,200,000) Merger and Acquisition Related Costs, including Amortization of Goodwill and Other Intangibles $(700,000) $0 Total Operating Expenses $(32,560,000) Income from Continuing Operations Before Income Taxes $8,440,000 Less: Income Taxes at 35% $(2,954,000) Income from Continuing Operations $5,486,000 Discontinued Operations: Income from Operations of Discontinued Division (less applicable income taxes) $350,000 Loss on Disposal of Discontinued Division (less applicable income taxes) $(150,000) Total Gain from Discontinued Operations $200,000 Extraordinary Items: Loss from fire (less applicable income taxes) $(200,000) Net Income $5,486,000 Divisional Revenues Books $15,000,000 $7,000,000 Online gaming $25,000,000 Customized MP3/CD/DVD $10,000,000 $3,000,000 Customized MP3/CD/DVD Inventory at end of 2009 $8,000,000 CanGo, Inc. is a fictional Internet company that exists to support the Mastering Series project. 2002 by Prentice-Hall, Inc. 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 $6,380,000 Prepaid Expenses $200,000 Goodwill and Other Purchased Intangibles $28,000,000 Less: Amortization $(700,000) Net Goodwill and Other Purchased Intangibles $27,300,000 Total Assets $235,900,000 LIABILITIES AND OWNERS' EQUITY Accounts Payable $22,000,000 Accrued Advertising $11,800,000 Other Liabilities and Accrued Expense $1,400,000 Current Portion of Long-Term Debt $2,300,000 Long Term Debt $57,400,000 Preferred Stock, $100 par value per share, 100,000 authorized, 0 shares issued and outstanding $0 Common Stock, $1 par value per share, 250,000,000 shares authorized, 13,000,000 shares issued, 12,900,000 outstanding $13,000,000 Additional Paid-in-Capital in excess of par value, Common Stock $117,000,000 Treasury Stock $(1,000,000) Retained Earnings (less Cash Dividends Paid) $12,000,000 $11,000,000 Total Liabilities and Owner's Equity $235,900,000 Income Statement December 31, 2009 December 31, 2008 Sales Revenues $51,000,000 $10,300,000 Less: Sales Returns $(1,000,000) $(300,000) Net Sales Revenues $50,000,000 $10,000,000 Less: Cost of Goods Sold $(9,000,000) $(4,000,000) Gross Profit $41,000,000 $6,000,000 Operating Expenses: Advertising and Sales $(26,000,000) $(3,000,000) Depreciation $(160,000) Salaries and Wages $(1,700,000) $(1,400,000) Product Development $(4,000,000) $(1,200,000) Merger and Acquisition Related Costs, including Amortization of Goodwill and Other Intangibles $(700,000) $0 Total Operating Expenses $(32,560,000) Income from Continuing Operations Before Income Taxes $8,440,000 Less: Income Taxes at 35% $(2,954,000) Income from Continuing Operations $5,486,000 Discontinued Operations: Income from Operations of Discontinued Division (less applicable income taxes) $350,000 Loss on Disposal of Discontinued Division (less applicable income taxes) $(150,000) Total Gain from Discontinued Operations $200,000 Extraordinary Items: Loss from fire (less applicable income taxes) $(200,000) Net Income $5,486,000 Divisional Revenues Books $15,000,000 $7,000,000 Online gaming $25,000,000 Customized MP3/CD/DVD $10,000,000 $3,000,000 Customized MP3/CD/DVD Inventory at end of 2009 $8,000,000 CanGo, Inc. is a fictional Internet company that exists to support the Mastering Series project.,When I open this file there is nothing inside the folder. 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Paper#8073 | Written in 18-Jul-2015

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