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Introduction to financial reporting analysis - McClure B.B.

McClure B.B. Introduction to financial reporting analysis - wiley publishing , 2009. - 596 p.
Download (direct link): introductiontofinancialrepor2009.pdf
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$0.24 stated value (authorized: 100,000,000
shares; issued and outstanding: 35,395,306
in 1998 and 35,599,356 in 1997) 8,428 8,476
Total capital stock 9,688 9,736
Paid-in capital 10,505 ---
Retained earnings 756,531 730,628
Accumulated other comprehensive income (1,926) (3,796)
Total shareholders’ equity 774,798 736,568
Total liabilities and shareholders’ equity $1,460,598 $1,412,083
established. In future periods, when the losses occur, they are charged to the allowance. Exhibit 3-4 presents the accounts receivable of Sun Microsystems (less allowances). At year-end 1998, the firm expects to realize $1,845,765,000. The gross receivables can be reconciled as follows:
Receivables, net Plus: Allowances Receivables, gross
$1,845,765,000
235,563,000
$2,081,328,000
82 Balance Sheet
OTHER CURRENT ASSET ITEMS
Nature of Asset Number of Companies
1997 1996 1995 1994
Deferred income taxes 375 378 365 363
Property held for sale 33 37 32 36
Unbilled costs 14 16 19 28
Advances or deposits 4 6 7 9
Other --- identified 29 30 33 29
Source: Accounting Trends & Techniques, copyright© 1998 by American Institute of Certified Public Accountants, Inc., p. 186. Reprinted with permission.
Other receivables may also be included in current assets. These receivables may result from contracts, tax refund claims, sales of assets, retained interest in sold receivables, employees, and installment notes or accounts.2
Inventories Inventories are the balance of goods on hand. In a manufacturing firm, they include raw materials, work in process, and finished goods. Inventories will be carried at cost, expressed in terms of lower-of-cost-or-market. (Cost methods and lower-of-cost-market are covered in Chapter 7.) Refer to Exhibit 3-5 for a presentation of inventory.
Raw Materials These are goods purchased for direct use in manufacturing a product, and they become part of the product. For example, in the manufacture of shirts, the fabric and buttons would be raw materials.
Work in Process Work in process represents goods started but not ready for sale. Work in process includes the cost of materials, labor costs for workers directly involved in the manufacture, and factory overhead. Factory overhead includes such cost items as rent, indirect wages, and maintenance.
SUN MICROSYSTEMS, INC. Illustration of Cash, Marketable Securities, and Accounts Receivable
At June 30,
(In thousands) 1998 1997
ASSETS (In Part)
Current assets:
Cash and cash equivalents $ 822,267 $ 660,170
Short-term investments 476,185 452,590
Accounts receivable, net of allowance of
$235,563 in 1998 and $196,091 in 1997 1,845,765 1,666,523
Inventories 346,446 437,978
Deferred tax assets 371,841 286,720
Other current assets 285,021 224,469
Total current assets $4,147,525 $3,728,450
Balance Sheet 83
exhibit 3-5
PFIZER INC. AND SUBSIDIARY COMPANIES Inventory
Consolidated Balance Sheet (In Part) December 31
(millions) 1998 1997 1996
Assets (In Part)
Current Assets
Cash and cash equivalents $1,552 $ 877 $ 1,150
Short-term investments 2,377 712 486
Accounts receivable, less allowance for doubtful accounts:
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