Question

In this paper, in addition to presenting the computed answers, please also discuss how you arrived at each answer the accounting problem asks. The accounting problem presents a company's balance sheet, income statement, and statement of cash flows for a theoretical company, Polly's Pet Products. Each of these statements has blank lines. Determine the values that would be appropriate for each blank line. Provide a narrative of how you arrived at each value. Include in this narrative an explanation of: 1. the financial statement being completed; 2. the account being valued; 3. its relationship to the other financial data. For example, if the accounts payable (AP) line was missing, describe what a balance sheet is and explain that you can derive the AP value based on knowing all the other values of the current liabilities section. Then explain what an account liability is, as well as why it would belong in the current liabilities section of the balance sheet. Finally, analyze, evaluate, and develop a conclusion about the company's performance based on the completed statements. Please refer to the income statement, balance sheet, and statement of cash flows of Polly's Pet Products. Superior papers will mention and explain the following elements when responding to the assignment question: .Provide correct balances for the blank financial account lines. Define the financial statement being completed. Discuss how the values were determined. Define and explain each account line that was completed. Analyze, evaluate, and develop conclusions about the company's performance based on the financial information.

Answer 1

First begin with income statement

1 operating expenses

Gross profit = revenue - operating expenses

where, operating expenses is the only missing figure

So operating expenses =revenue - gross profit

=650000-205000

operating expenses =445000

2 operating income

operating income = gross profit - general and administrative expenses

=205000-75000

operating income = 130000

3 income before provision for income tax

=operating income - other expenses

=130000-60000

income before provision for income tax =70000

4 net income

=income before provision for income tax - provision for income tax

=70000- 5000

net income = 65000

5 retained earnings, ending balance

=retained earnings, Beginning balance+net income

=103500+65000

retained earnings, ending balance=168500

After being completing income statement next is to move towards Balance sheet

6 Total stockholder's equity

=common share + additional paid in share +retained earnings( as per Working note 5 value received )

=5000+15000+168500

Total stockholder's equity=188500

7 accrued expenses

= Total current liability- current liability other than accrued income

=123500-(75000+5000+12000+1500)

accrued expenses=30000

8 total liability and stockholders equity

= total liability+ total stockholder's equity

=161500+188500

total liability and stockholders equity=350000

9 total current asset

= Total asset(where Total liability and stockholders equity are same ie; both sides of balance sheet are same)- fixed asset

=350000-75000

total current asset =275000

10 cash

= total current asset- current asset other than cash

=275000-(50000+25000)

cash = 200000

next move towards Stmt of Cash flow

11 net cash in changes

=cash balance ,end of year- cash balance, beginning of the year

cash balance ,end of year is being received from the Balance sheet as per working note 10

=200000-30000

net cash in changes=170000

12 net cash provided by Financing activity

=new loan -repayment on loan +issuance on common shares of stock

=50000-45000+5000

net cash provided by Financing activity=10000

13 cash paid out to suppliers and employers

=net cash provided by operating activity - cash received from customers + interest paid + taxes paid

=185000-600000+5000+10000

=-400000(payment is a negative figure in cash as it is a outflow)

cash paid out to suppliers and employers=400000