BEFORE ACCEPTING ASSIGNMENT MAKE SURE YOU CAN LOCATE THE PROBLEMS FOR THIS ASSIGNMENT!! MUST SHOW ALL WORK!Week 1 Homework ProblemsComplete P1-3B and P1-4B from Problems: Set B Chapter 1 and P2-7B fro

BUS591 – Financial Statement and Analysis

Week 1 Homework Assignment Templates

Instructions: Only enter data in the yellow boxes. The remaining areas are already completed for you.

Save the file as follows: lastnamewk1.docx

Submit to the assignment box before the due date. (Late assignments will receive a late penalty).

Grading Rubric: There are a total of 68 “questions” for you to answer (as determined by the yellow box). Each item is worth 0.06 points for a total of 4.00 points.

P1-3B, Prepare an income statement, retained earnings statement, and balance sheet; discuss results.

Instructions:
(a) Prepare an income statement and a retained earnings statement for the month of May and a balance sheet at May 31, 2014.
SHAW’S GARDEN
Income Statement
For the Month Ended May 31, 2014
Revenues
Account title				Amount
Expenses
Account title		Amount
Account title		Amount
Account title		Amount
Account title		Amount
Total expenses				Amount
Net income				Amount

SHAW’S GARDEN
Retained Earnings Statement
For the Month Ended May 31, 2014
Retained earnings, May 1				Amount
Add:	Account title		Amount
				Amount
Less:	Account title		Amount
Retained earnings, May 31				Amount

SHAW’S GARDEN
Balance Sheet
May 31, 2014
Assets
Account title			Amount
Account title			Amount
Account title			Amount
Total assets			Amount

Liabilities and Stockholders' Equity
Liabilities
Account title			Amount
Account title			Amount
Total liabilities			Amount
Stockholders' equity
Account title	Amount
Account title	Amount
Total stockholders' equity		Amount
Total liabilities and stockholders' equity		Amount

(b) Briefly discuss whether the company’s first month of operations was a success.
Enter text answer here.

(c) Discuss the company’s decision to distribute a dividend.
Enter text answer here.

P1-4B, Determine items to be included in a statement of cash flows, prepare a cash flow statement and discuss the results.

Instructions:

(a) Determine which items should be included in a statement of cash flows and then prepare the statement for Preacher Corporation.

Enter text answer here.

PREACHER CORPORATION
Statement of Cash Flows
For the Year Ended December 31, 2014
Cash flows from operating activities
Activity	Amount
Activity	Amount
Net cash provided by operating activities		Amount
Cash flows from investing activities
Activity	Amount
Activity	Amount
Net cash used by investing activities		Amount
Cash flows from financing activities
Activity	Amount
Activity	Amount
Net cash provided by financing activities		Amount
Net increase in cash		Amount

(b) Comment on the adequacy of net cash provided by operating activities to fund the company’s investing activities and dividend payments.
Enter text answer here.

(Continued)

P2-7B, Compute values and ratios for the following; discuss results.

Instructions:
(a) For each company, compute these values and ratios: be sure to show your computations!
	Home Depot	Lowe’s
Working Capital	Amount	Amount
Current ratio (round to two decimal places)	Amount	Amount
Debt to total assets ratio	Amount	Amount
Free cash flow	Amount	Amount
Earnings per share	Amount	Amount

(b) Compare the liquidity, profitability and solvency of the two companies.
Enter text answer here.