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I am having trouble figuring this out, The financi...




I am having trouble figuring this out, The financial information is pasted here and it wants me to insert the information into the spreadsheet attached. 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


Paper#9639 | Written in 18-Jul-2015

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