82. Fargo ManufacturingCondensed data from the financial statements of Fargo Manufacturing for 2012 and 2011 are presented below. The figures are expressed in thousands.
Statement A
2012
2011
Total current assets
$219,560
$180,080
Property, plant & equipment
(net of accumulated depreciation)
18,320
12,724
Investments
3,370
1,061
Other assets
12,220
10,606
Total assets
$253,470
$204,471
Total current liabilities
92,990
86,600
Long-term debt
15,160
20,156
Total liabilities
108,150
106,756
Stockholders’ equity:
Contributed capital
53,680
32,250
Retained earnings
91,640
65,465
Total stockholders’ equity
145,320
97,715
Total liabilities & stockholders’ equity
$253,470
$204,471
Statement B
2012
2011
Net sales
$229,301
$184,701
Cost of sales
135,453
119,284
Gross margin
93,848
65,417
Selling, general and administrative expenses
64,832
52,220
Other income (expense)
693
(118)
Income (loss) before income taxes
29,709
13,079
Income tax expense
3,534
2,109
Net income (loss)
$ 26,175
$ 10,970
Refer to the information provided for Fargo Manufacturing. Was Fargo Manufacturing profitable both years? What are the amounts of the total revenues and total expenses, respectively, for 2012? Which financial statement provides this information to you?
83. How is a classified balance sheet useful to decision makers?
84. How does the definition of a current liability relate to that of a current asset?
85. Potential stockholders and lenders are interested in a company’s financial statements. Several financial statement items appear below. Answer the questions that follow.
Accounts receivable
Accounts payable
Advertising expenses
Cash
Depreciation expense
Income taxes
Common stock
Land held for future expansion
Dividends
Retained earnings
Loss on the sale of equipment
Net income
Office supplies
Patent amortization expense
Sales
Unearned revenue
Utilities expense
A)
List the two items from above in which stockholders would be most interested. Explain why the two you selected are important to stockholders.
B)
In which one item would lenders be most interested? Explain why this item is important.
86. What information is provided in an annual report in addition to the financial statements?
87. What is meant by “generally accepted accounting principles”?
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