FIN 500 Saudi Electronic University Principles of Finance Worksheet

Module 2 Critical Thinking AssignmentUnderstanding Financial Statements and Cash Flow
Problem 2-1: Preparing Financial Statements
Information below is for Buraydah Manufacturing, Inc. for the
year ended December 31, 20×1 except where beginning of year
numbers indicated. All amounts in SAR unless otherwise stated.
Accumulated depreciation
Sales
Accounts receivable
Interest expense
Cost of goods sold
Short term notes payable
Income taxes
Inventories
Common stock
Dividends paid
Cash
Marketing, general and administrative expenses
Long term debt
Fixed assets (property & equipment)
Accounts payable
Other assets
Depreciation expense
Retained earnings at beginning of year
Number of shares of common stock
Using the information above:
1. Prepare an income statement in good form
2. Prepare end of year balance sheet in good form
3. Calculate net working capital
4. Calculate the debt ratio
Using an additional column for each financial statement:
5. Prepare a common sized income statement
6. Prepare a common sized balance sheet
2,817,000
5,826,000
233,000
237,000
2,672,000
195,000
366,600
967,000
428,000
120,000
986,500
1,678,500
5,844,000
7,218,000
395,000
862,000
422,000
419,600
1,000
Problem 2-2 Preparing Statement of Cash
Flows
Given the following information, prepare a statement of cash
flows.
Dividends
Increase in common stock
Decrease in accounts receivable
Increase in inventories
Operating income
Increase in accounts payable
Interest expense
Depreciation expense
Increase in long term debt
Increase in fixed assets
Income taxes
Beginning cash balance
Assume all amounts are in 000’s SAR.
15
22
24
35
80
25
25
12
48
33
17
20