Instructions:

Complete the each of following seven tabs in this MS Excel Workbook using the information contained in them:
Post the Journal Entries (to record the transactions of FirstRate Company during the final week of its fiscal year ended [FYE]
Dec. 31, 20X5) to the consolidated Trial Balance of the company as of December 31, 20X5
Consolidated Balance Sheet of the company as of December 31, 20X5
Consolidated Income Statement, including comprehensive income, of the company for its FYE December 31, 20X5
Statement of Cash Flows (SCF) Support Schedule, which provides information useful for preparing the SCF
Consolidated Statement of Cash Flows (SCF) of the company for its FYE December 31, 20X5
Consolidated Statement of Changes in Shareholders' Equity of the company for its FYE December 31, 20X5
Complete the assignment by working "from left to right." That is, first, complete the Trial Balance, followed by the Balance Sheet, then the
Income Statemet tab, etc.
The background paper, Financial Statement Concepts and Financial Reporting , provides useful guidance for completing this assignment.

The facilitator will grade this assignment, assigning up to 100 points for it as follows: Maximum Earned
Trial Balance 15 15 points
Balance sheet 20 20
Income Statement 20 20
Cash Flow Statement (SCF) and SCF Support Schedule 30 30
Statement of Changes in Stockholders' Equity 15 15
Total points 100 100
 FirstRate Company and subsidiaries
General Journal
(U.S. dollars in thousands)
(Assumes company does NOT use special journals, such as sales journal, purchases journal, cash journal, or payroll journal)

Date General ledger accounts / Explanation Debit Credit

Dec. 31, 20X5
Dr. Accounts receivable, gross 800
Cr. Sales revenue (gross) 800
Explanation: To record credit sales for the last few days of 20X5

Dec. 31, 20X5

Dr. Cost of goods sold (COGS) - other 600
Cr. Inventory, at lower of cost or market 600
Explanation: To record cost of sales for the last few days of 20X5

Dec. 31, 20X5

Dr. Cash and cash equivalents 700
Cr. Accounts receivable, gross 700
Explanation: To record collections of accounts receivables for the last week of 20X5

Dec. 31, 20X5

Dr. Allowance for uncollectible accounts receivable 200
Cr. Accounts receivable, gross 200
Explanation: To record write-off of AR outstanding more than 6 months as of Dec. 28, 20X5

Dec. 31, 20X5

Dr. Selling and administrative expenses - other 200
Cr. Cash and cash equivalents 200
Explanation: To record payment of employee 20X5 bonuses, declared by board on Dec. 28, 20X5

Dec. 31, 20X5

Dr. Inventory, at lower of cost or market 500
Cr. Accounts payable 500
Explanation: To record purchases of raw materials during last week of 20X5 on credit (terms net 30 days)

Total debits and credits 3,000 3,000

 FirstRate Company and subsidiaries
Trial Balance Fiscal Year 20X5 Ta
(pa
(U.S. dollars in thousands) en
an
JEs Final Week of 20X5
FYE Dec. 31, FYTD Dec. 24, FYE Dec. 31,
General ledger (GL) account 20X4 20X5 Debits (Credits) 20X5
Cash and cash equivalents Debit 2,100 600 700 (200) 1,100
Investment securities available for sale (market value) Debit 20,200 21,700 21,700
78,000 94,600 800 (700)
Accounts receivable, gross Debit
(200) 94,500
Allowance for uncollectible accounts receivable Credit (2,700) (3,800) 200 (3,600)
Inventory, at lower of cost or market Debit 137,600 160,100 500 (600) 160,000
Property, plant, and equipment, at cost Debit 292,500 266,700 266,700
Accumulated depreciation on PP&E Credit (129,700) (105,200) (105,200)
Accounts payable Credit (81,600) (96,700) (500) (97,200)
Accrued income taxes payable Credit (2,300) (1,800) (1,800)
Dividends payable on common stock Credit (19,800) (16,000) (16,000)
Bank note payable - current portion Credit (89,800) (113,900) (113,900)
Bank note payable - noncurrent portion Credit (52,700) (55,400) (55,400)
Accrued interest payable Credit (2,500) (3,100) (3,100)
6% Preferred stock, at par value Credit (20,000) (20,000) (20,000)
Common stock, at par value Credit (42,700) (42,700) (42,700)
Additional paid-in capital (APIC) Credit (8,300) (8,300) (8,300)
Treasury stock Debit 1,100 1,100 1,100
Accum. other comprehensive income (loss) Dr (Cr) 200 (1,300) (1,300)
Retained earnings - beginning of year Credit (82,500) (79,600) (79,600)
Dividends declared on preferred stock - current year Debit 1,200 1,200 1,200
Dividends declared on common stock - current year Debit 19,800 16,000 16,000
Sales revenue (gross) Credit (674,200) (742,300) (800) (743,100)
Sales returns and allowances Debit 12,800 16,300 16,300
Cost of goods sold (COGS) - depreciation Debit 11,400 10,000 10,000
Cost of goods sold (COGS) - other Debit 469,400 523,600 600 524,200
Selling and administrative expenses - depreciation Debit 600 500 500
Selling and administrative expenses - other Debit 109,200 122,900 200 123,100
Research and development (R&D) expenses Debit 23,800 24,000 24,000
Other operating expenses Debit 9,900 12,300 12,300
Gain on disposal of PP&E Credit - (1,100) (1,100)
Loss on disposal of PP&E Debit - - -
Interest on bank note Debit 9,900 12,500 12,500
Income tax provision Debit 9,100 7,100 7,100
Loss from discontinued oper., (before tax effect) Debit - - -
Extraordinary loss (before tax effect) Debit - - -
Total debits (credits) - - 3,000 (3,000) -
Net balance of nominal (or, temporary) accounts (18,100) (14,200) 800
 FirstRate Company and subsidiaries
Consolidated Balance Sheet
December 31, 20X5
(U.S. dollars in thousands)

Assets:

Current assets:

Cash and cash equivalent $ 1,100

Investment securities available for sale (market value) 21,700
Accounts receivable, gross 94,500
Allowance for uncollectible accounts receivable (3,600)
Inventory, at lower of cost or market 160,000
Total current assets 273,700

Property, plant, and equipment, at cost 266,700

Accumulated depreciation on PP&E (105,200)
Property, plant, and equipment, net 161,500
Total assets $ 435,200

Liabilities:

Current liabilities:

Accounts payable 97,200

Accrued income taxes payable 1,800
Dividends payable on common stock 16,000
Bank note payable - current portion 113,900
Accrued interest payable 3,100
Total current liabilities $232,000
Bank note payable - noncurrent portion 55,400
Total liabilities $287,400
Stockholders' equity:

6% Preferred stock, at par value 20,000

Common stock, at par value 42,700
Additional paid-in capital (APIC) 8,300
Treasury stock (1,100)
Accum. other comprehensive income (loss) 1,300
Retained earnings - beginning of year 76,600
Total stockholders' equity 147,800
Total liabilities and stockholders' equity $435,200
 FirstRate Company and subsidiaries
Consolidated Income Statement
Fiscal year ended December 31, 20X5
(U.S. dollars in thousands, except per share amounts)

Sales revenue (net of returns and allowances) $ 726,800

Cost of goods sold (COGS) - gross (534,200)
Gross profit 192,600
Operating expenses:

Selling and administrative expenses - gross (123,600)

Research and development (R&D) expenses (24,000)
Other operating expenses (12,300)
Total operating expenses (159,900)
Operating income 32,700
Non-operating items:

Non-operating revenues and gains:

Gain on disposal of PP&E 1,100

Non-operating expense and losses:

Interest on bank note (12,500)

Income before income taxes 21,300
Income tax provision (7,100)
Net income $ 14,200

Earnings per share:

Net income $ 0.33

Weighted average number of common shares outstanding 42,563,000

Comprehensive income:

Net income $ 14,200

Other comprehensive income:

Other comprehensive income (loss) 1,500

Comprehensive income $ 15,700
 FirstRate Company and subsidiaries
Consolidated SCF Support Schedules (NOT for inclusion in U.S. GAAP-GPFS)
Fiscal year ended December 31, 20X5
(U.S. dollars in thousands)

December 31,

Working capital assets: 20X5 20X4 Increase (decrease)

Accounts receivable, net of allowance $ 90,900 $ 75,300 $ 15,600 Use of cash

Inventory, at lower of cost or market 160,000 137,600 22,400 Use of cash
Working capital liabilities:

Accounts payable 97,200 81,600 15,600 Source of cash

Accrued income taxes payable 1,800 2,300 (500) Use of cash
Accrued interest payable 3,100 2,500 600 Source of cash
Net working capital $ 148,800 $ 126,500 $ 22,300 Net use of cash

Non-working capital asset accounts

Property, plant, and equipment (PP&E), at cost

Balance at beginning of period, reported in December 31, 20X4 balance sheet $ 292,500
Increase: Acquisitions of PP&E during 20X5 9,200
Decrease: Original cost of equipment sold in 20X5 (fully depreciated at date of disposal) (35,000)
Balance at end of period, reported in December 31, 20X5 balance sheet $ 266,700

Accumulated depreciation (of PP&E)

Balance at beginning of period, reported in December 31, 20X4 balance sheet $ 129,700
Increase: Depreciation of PP&E for 20X5 10,500
Decrease: Accumulated depreciation on equipment sold in 20X5 (35,000)
Balance at end of period, reported in December 31, 20X5 balance sheet $ 105,200

Non-working capital liability accounts

Dividends payable on common stock

Balance at beginning of period, reported in December 31, 20X4 balance sheet $ 19,800
Increase: Dividends declared on common stock on December 15, 20X5 16,000
Decrease: Dividends paid during FYE December 31, 20X5 (19,800)
Balance at end of period, reported in December 31, 20X5 balance sheet $ 16,000

Current Non-current
Bank note payable portion portion Total
Balance at beg. of period, reported in Dec. 31, 20X4 balance sheet 89,800 52,700 142,500
Increase: Additional borrowings during 20X5 ("plugged" from remaining info 26,800
Decrease: None (FirstRate made no repayments during 20X5) -
Balance at end of period, reported in Dec. 31, 20X5 balance sheet 113,900 55,400 169,300

Stockholders' equity accounts

Preferred stock, par value $100 per share

Balance at beginning of period, reported in December 31, 20X4 balance sheet 20,000
Increase: None -
Decrease: None -
Balance at end of period, reported in December 31, 20X5 balance sheet 20,000
Common stock, par value $1 per share

Balance at beginning of period, reported in December 31, 20X4 balance sheet 42,700
Increase: NO shares issued in 20X5, at par value -
Decrease: NA - see Treasury Stock, below -
Balance at end of period, reported in December 31, 20X5 balance sheet 42,700
Additional paid-in capital (APIC)

Balance at beginning of period, reported in December 31, 20X4 balance sheet 8,300
Increase: NO shares issued in 20X5 -
Decrease: None (not applicable) -
Balance at end of period, reported in December 31, 20X5 balance sheet 8,300
Treasury stock

Balance at beginning of period, reported in December 31, 20X4 balance sheet 1,100
Increase: NO shares repurchased in 20X5 -
Decrease: None (NO treasury shares re-sold in 20X5) -
Balance at end of period, reported in December 31, 20X5 balance sheet 1,100
Retained earnings

Balance at beginning of period, reported in December 31, 20X4 balance sheet 79,600
Increase: Net income for FYE December 31, 20X5, as reported in the income statement 14,200
Decrease: Preferred dividends declared (and paid) in 20X5 1,200
Decrease: Common stock dividends declared (refer to analysis of dividends payable, above) (18,400)
Balance at end of period, reported in December 31, 20X5 balance sheet 76,600

Determination of Supplemental Disclosures of Interest and Income Taxes Paid

Accrued interest payable

Balance at beginning of period, reported in December 31, 20X4 balance sheet 2,500
Increase: Interest on bank note, as reported in the income statement 12,500
Decrease: Interest paid during 20X5 (inferred, or "plugged," from remaining info) (11,900)
Balance at end of period, reported in December 31, 20X5 balance sheet 3,100
Accrued income taxes payable

Balance at beginning of period, reported in December 31, 20X4 balance sheet 2,300
Increase: Income tax provision (i.e., income tax expense) reported in the income statement: 7,100
Decrease: Income taxes paid during 20X5 (inferred, or "plugged," from remaining info) (7,600)
Balance at end of period, reported in December 31, 20X5 balance sheet 1,800
 FirstRate Company and subsidiaries
Consolidated Statement of Cash Flows
Fiscal year ended December 31, 20X5
(U.S. dollars in thousands)

Net income 14,200

Adjustments to reconcile net income to cash flows provided by operating activities:

Depreciation of property, plant, and equipment 10,500

Gain on disposal of equipment (1,100)
Loss on sale of equipment -
Changes in working capital accounts:

Decrease (increase) in accounts receivable, net (15,600)

Decrease (increase) in inventory (22,400)
Increase (decrease) in accounts payable 15,600
Increase (decrease) in accrued income taxes payable (500)
Increase (decrease) in accrued interest payable 600
Net cash provided by (used in) operating activities 1,300
Cash flows from investing activities:

Proceeds on sale of equipment 1,100

Acquisitions of property, plant, and equipment (9,200)
Net cash provided by (used in) investing activities (8,100)
Cash flows from financing activities:

Net proceeds from issuance of common stock -

Repurchases of common stock -
Redemption of preferred stock -
Payment of dividends on preferred stock (1,200)
Payment of dividends on common stock (19,800)
Proceeds from borrowings under bank note agreement 26,800
Net cash provided by (used in) financing activities 5,800
Net increase (decrease) in cash and cash equivalents (1,000)
Cash and cash equivalents, January 1, 20X5 2,100
Cash and cash equivalents, December 31, 20X5 $ 1,100

Supplemental disclosures:

Cash paid in 20X5 for interest $ 11,900

Cash paid in 20X5 for income taxes 7,600
 FirstRate Company and subsidiaries
Statement of Changes in Stockholders Equity
Fiscal year ended December 31, 20X5
(U.S. dollars in thousands)

Additional Accum. other Total

Preferred Common paid-in Treasury comprehensiv Retained stockholders'
stock stock capital stock e income earnings equity
Balance at January 1, 20X5 $ 20,000 $ 42,700 $ 8,300 $ (1,100) $ (200) $ 79,600 $ 149,300
Preferred stock redeemed - -
Common stock issued - - -
Common stock repurchased - -
Net income 0 0
Other comprehensive income (loss) 1,500 1,500
Dividends on common stock (18,400) (18,400)
Dividends on preferred stock 1,200 1,200
Balance at December 31, 20X5 $ 20,000 $ 42,700 $ 8,300 $ (1,100) $ 1,300 $ 62,400 $ 133,600