Sample Accounting Assignment

Company name -Maple Leaf Foods
Year end -December 31, 2010

Main business activity of your Company

Solution:
Maple Leaf Foods operates three core businesses:

  1. Meat Products Group comprises the two leading Canadian brands in fresh and prepared meats, Maple Leaf and Schneiders, as well as Maple Leaf Prime Naturally fresh, seasoned and prepared chicken and a number of leading sub-brands.
  2. Bakery Products Group caters to fresh bakery business.
  3. Agribusiness Group provides raw material and essential services to Maple Leaf’s fresh and prepared meats facilities

What is the stock exchange trading symbol for your company? - MFI

What was the date that the company posted their audited year-end financial statements on the Sedar.com website. _______________________________________
Within a company’s Annual Report, management and its Board will usually provide information regarding the company’s future plans and strategies. Please list three of your company’s plans, goals or objectives for the future (after the year end). Other resources you may wish to consult are business publications, news reports etc. (please note your sources of this information)

Solution:

1. Jobs are safe at Maple Leaf Foods
2. Maple Leaf Foods Plans Investments, Plant Closures To Boost Profits
3. Maple Leaf Foods returns to Q3 profit.
Using the results for your company’s most recent year end (unless otherwise indicated), please answer the following questions:

1. What was the Total Revenue of your company? (Pg 58) $ 4,968,119,000
2. Did the total Revenue increase or decrease from the previous year and by how much (show calculation)? Revenue decreased by 4.9%

2010= $4,968,119,000
2009= $ 5,221,602,000

Decrease in Revenue= (4,968,119,000/5,221,602,000)-1=4.9%

3. What was your company’s Net Income (loss) and if applicable, Comprehensive Net Income (loss)? $25,822,000

4. What was the value of the company’s Total Assets? $ 2,996,795,000

5. What was the largest Asset reported? (Pg 57) Property, plant and equipment,

6. In which Financial Statement (not notes to the financial statements) would you find information about Dividends? Did your company pay its shareholders any Dividends during the year? If so, how much?

Solution:

Cash flows contains information on Dividends,

Yes, the company paid $0.16  per share to common share holders and $0.18 per share to convertible shareholders.

7. Does the company have any intangible assets? If yes, what type?

Solution:

The company has following types of intangible assets; Goodwill, Customer relationships, poultry quota, software and others.

8. Does your company report Inventory? If so, how much ($)? 319,263,000

9. What type of inventory is it? Finished goods, raw materials, supplies?

Solution:

Included in the cost of inventory are direct product costs, direct labour and an allocation of variable and fixed manufacturing overhead including depreciation.

10. What type of Costing method has the company used to value its Inventory?

Solution:

Inventories are valued at the lower of cost and net realizable value, with cost being determined substantially on a first-in,
first-out basis.

11. What is your company’s Largest Expense account in the current year? Cost of sales

12. Are the financial statements consolidated? If yes, with whom are they consolidated?

Solution:

The consolidated financial statements include the accounts of Meat Products Group, Agribusiness Group and Bakery Products Group.

13. Record the Accounting Equation using the amounts ($) from your company’s Financial Statements for both year ends presented in the financial statements.

Solution:

Accounting Equation:
Assets= Liabilities+ Equities
For 2010, Accounting Equation is:
Assets= $ 2,996,795,000
Liabilities= $ 1,779,418,000
Equities= 1,217,377,000
For 2009, Accounting Equation is:
Assets= $ 3,057,464,000
Total liabilities= 1,868,414,000

Equity= 1,189,050,000
14. Calculate the following for your company for both years shown on their F/S:

 

Most Recent Year End

Prior Year End

Show Calculations

Working capital

= 590,995,000- 1,097,904,000
= -506,909,000

=617,238,000-737,413,000
=-120,175,000

 

Current Ratio

=590,995,000/ 1,097,904,000
=0.54

=617,238,000/737,413,000
=0.84

 

Based on the information above, has the liquidity of your company improved over the prior year? Yes or No and Explain.

Solution:

The liquidity of the company has declined from 0.84 to 0.54. The working capital has also declined.

15. What are accrued liabilities? Does the company report any accrued liabilities? If yes, how much and what type(s) (pg.83)?

Solution:

Accrued liabilities $22,546,000

16. Is the company’s Balance Sheet a Classified Balance Sheet, how do you know?

Solution:

Yes, the company’s Balance Sheet is a Classified Balance Sheet.

17. What is the balance of Retained Earnings or Deficit at year end? (pg 77) $ 346,319,000
18. What was the largest Current Liability reported? Accounts payable and accrued charges of $521,746,000

19. What was the Total Balance of Long Term Liabilities reported by your company? (Page 57) $681,514,000
20. Does the company have any commitments or contingencies? If yes, briefly describe them in your own words (page 87 Note#23]

Solution:

The Company has operating lease, rent and other commitments with total payments of $ 344,144,000.

21. If applicable, what was the balance of the Current Portion of LTD?

$ 496,835,000

22. What is the dollar value reported for Capital stock and how many shares are issued and outstanding?

Solution:

Dollar value reported for Capital stock= $ 1,217,377,000
Shares outstanding= 140,044,089

23. What is the amount of the company’s Allowance for Doubtful Accounts at year end? If there is none, where did you look?

Solution:

As at December 31, 2010, the Company has recorded an allowance for doubtful accounts of
$6.8 million (2009: $10.2 million).

24. Who are the auditors of this company? Are the auditors part of this company’s management and do the auditors dictate which accounting policies this company choses (explain)?

Solution:

Auditor of this company is KPMG LLP. The auditors are not the part of this company’s management and the auditors do not dictate which accounting policies this company chooses.

25. How much Cash has been generated (or used) from (each) Operating, Investing and Financing Activities ?

Solution:

Cash has been generated (or used) from:
Operating Activities= $ 283,668,000
Investing Activities = $ (160,105,000)
Financing Activities= $ (164,490,000)

26. The Balance for Cash at the Bottom of the Statement of Cash Flows statement agrees to what other balance in which Financial Statement?

Solution:

Balance for Cash at the Bottom of the Statement of Cash Flows statement agrees to Cash and cash equivalents in the Financial Statement

27. Go to the F/S Note which supports your Long-Term Assets such as “Property, plant and equipment” and copy it into the following chart, if available:

Assets
Name or category

Cost (in thousands)

Accumulated Depreciation per group of assets if available (in thousands)

Net Book Value (in thousands)

Other long term assets

$333,833

 -

$333,833

Goodwill

$ 850,382

-

$ 850,382

Intangible assets

$ 53,996

-

$ 53,996

Property

$ $ 2,440,066

$ (1,402,638)

$ 1,037,428

28. What Depreciation method does your company use to Depreciate their Fixed Assets?

Solution:
Depreciation is calculated using the straight-line basis, which is based on the expected useful life of the assets as follows:
Buildings 15 – 40 years
Machinery and equipment 3 – 10 years

29. Identify and describe one interesting thing you learned about your company from reviewing their financial statements and the accompanying notes.


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