Project #43268 - Journal Entries / Financial Statements

Please complete Part 1 and Part 2 on two seperate Excel tabs.

Part 1

(Note: This is a continuation of the Cookie Chronicle from Chapters 1 through 9.)

CCC10 Natalie is thinking of repaying all amounts outstanding to her grandmother. Recall that Cookie Creations borrowed \$2,000 on November 16, 2014, from Natalie’s grandmother. Interest on the note is 9% per year, and the note plus interest was to be repaid in 24 months. Recall that a monthly adjusting journal entry was prepared for the months of November 2014 (1/2 month), December 2014, and January 2015.

Instructions

(c)  Natalie repays her grandmother on September 15, 2015—10 months after her grandmother extended the loan to Cookie Creations. Prepare the journal entry for the loan repayment.

Part 2

BYP13-1         Your parents are considering investing in Tootsie Roll Industries common stock. They ask you, as an accounting expert, to make an analysis of the company for them. Fortunately, excerpts from a recent annual report of Tootsie Roll are presented in Appendix A of this textbook.

Appendix A / Financial Statements

http://www.sec.gov/Archives/edgar/data/98677/000110465912014416/a11-31190_2ex13.htm

Instructions

(a)        Make a 5-year trend analysis, using 2007 as the base year, of (1) net sales and (2) net earnings. Comment on the significance of the trend results.

(b)        Compute for 2011 and 2010 the (1) debt to assets ratio and (2) times interest earned. (See Note 6 for interest expense.) How would you evaluate Tootsie Roll’s long-term solvency?

(c)        Compute for 2011 and 2010 the (1) profit margin, (2) asset turnover, (3) return on assets, and (4) return on common stockholders’ equity. How would you evaluate Tootsie Roll’s profitabil- ity? Total assets at December 31, 2009, were \$836,844,000, and total stockholders’ equity at December 31, 2009, was \$654,244,000.

(d) What information outside the annual report may also be useful to your parents in making a decision about Tootsie Roll?

 Subject Business Due By (Pacific Time) 10/14/2014 12:00 am
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