ACCOUNTING-TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS

QUESTION

11/15/2015Broadening Your Perspective 8­1Print by: VANESSA MONTESACC/291 ­ 49575374 / Copy of Assignment: Week 1 AssignmentBroadening Your Perspective 8­1Your answer is incorrect. Try again.The financial statements of Tootsie Roll are presented below.TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OFEarnings, Comprehensive Earnings and Retained Earnings (in thousands except pershare data)For the year ended December 31,201120102009Net product sales$528,369$517,149$495,592Rental and royalty revenue4,1364,2993,739Total revenue532,505521,448499,331Product cost of goods sold365,225349,334319,775Rental and royalty cost1,0381,088852Total costs366,263350,422320,627Product gross margin163,144167,815175,817Rental and royalty gross margin3,0983,2112,887Total gross margin166,242171,026178,704Selling, marketing and administrative expenses108,276106,316103,755Impairment charges——14,000Earnings from operations57,96664,71060,949Other income (expense), net2,9468,3582,100Earnings before income taxes60,91273,06863,049Provision for income taxes16,97420,0059,892$43,938$53,063$53,157Net earningsNet earningsOther comprehensive earnings (loss)Comprehensive earningsRetained earnings at beginning of year.Net earningsCash dividendsStock dividendsRetained earnings at end of yearEarnings per share$43,938(8,740)$35,198$135,86643,938(18,360)(47,175)$114,269$0.76$53,0631,183$54,246$53,1572,845$56,002$147,68753,063(18,078)(46,806)$135,866$144,94953,157(17,790)(32,629)$147,687$0.90Average Common and Class B Common shares57,89258,685outstanding(The accompanying notes are an integral part of these statements.)$0.8959,425CONSOLIDATED STATEMENTS OFFinancial PositionTOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES (in thousands except pershare data)AssetsDecember 31,20112010CURRENT ASSETS:Cash and cash equivalents$78,612$115,976Investments10,8957,996http://edugen.wiley.com/edugen/shared/assignment/test/qprint.uni1/511/15/2015Broadening Your Perspective 8­1Accounts receivable trade, less allowances of $1,731 and $1,531Other receivablesInventories:Finished goods and work­in­processRaw materials and suppliesPrepaid expensesDeferred income taxesTotal current assetsPROPERTY, PLANT AND EQUIPMENT, at cost:LandBuildingsMachinery and equipmentConstruction in progressLess—Accumulated depreciationNet property, plant and equipmentOTHER ASSETS:GoodwillTrademarksInvestmentsSplit dollar officer life insurancePrepaid expensesEquity method investmentDeferred income taxesTotal other assetsTotal assetsLiabilities and Shareholders’ EquityCURRENT LIABILITIES:Accounts payableDividends payableAccrued liabilitiesTotal current liabilitiesNONCURRENT LIABILITES:Deferred income taxesPostretirement health care and life insurance benefitsIndustrial development bondsLiability for uncertain tax positionsDeferred compensation and other liabilitiesTotal noncurrent liabilitiesSHAREHOLDERS’ EQUITY:Common stock, $.69­4/9 par value—120,000 shares authorized—36,479 and 36,057 respectively, issuedClass B common stock, $.69­4/9 par value—40,000 sharesauthorized—21,025 and 20,466 respectively, issuedCapital in excess of par valueRetained earnings, per accompanying statementAccumulated other comprehensive lossTreasury stock (at cost)—71 shares and 69 shares, respectivelyTotal shareholders’ equityTotal liabilities and shareholders’ equity41,8953,39137,3949,96142,67629,0845,070578212,20135,41621,2366,499689235,16721,939107,567322,9932,598455,097242,935212,16221,696102,934307,1789,243440,974225,482215,49273,23773,237175,024175,02496,16164,46174,20974,4413,2126,6803,9354,2547,7159,203433,493407,300$857,856$857,959December 31,20112010$10,6834,60343,06958,355$9,7914,52944,18558,50543,52126,1087,5008,34548,092133,56647,86520,6897,5009,83546,157132,04625,33325,04014,60114,212533,677114,269(19,953)(1,992)665,935$857,856505,495135,866(11,213)(1,992)667,408$857,959TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OFCash Flows (in thousands)For the year ended December31,201120102009CASH FLOWS FROM OPERATING ACTIVITIES:http://edugen.wiley.com/edugen/shared/assignment/test/qprint.uni2/511/15/2015Broadening Your Perspective 8­1Net earningsAdjustments to reconcile net earnings to net cashprovided by operating activities:DepreciationImpairment chargesImpairment of equity method investmentLoss from equity method investmentAmortization of marketable security premiumsChanges in operating assets and liabilities:Accounts receivableOther receivablesInventoriesPrepaid expenses and other assetsAccounts payable and accrued liabilitiesIncome taxes payable and deferredPostretirement health care and life insurance benefitsDeferred compensation and other liabilitiesOthersNet cash provided by operating activitiesCASH FLOWS FROM INVESTING ACTIVITIES:Capital expendituresNet purchase of trading securitiesPurchase of available for sale securitiesSale and maturity of available for sale securitiesNet cash used in investing activitiesCASH FLOWS FROM FINANCING ACTIVITIES:Shares repurchased and retiredDividends paid in cashNet cash used in financing activities$43,938$53,063$53,15719,229——1941,26718,279——34252217,86214,0004,400233320(5,448)3,963(15,631)5,10684(5,772)2,0222,146(708)50,390717(2,373)(1,447)4,9362,1802,3221,4292,52531082,805(5,899)(2,088)4555,203(2,755)(12,543)1,3842,96030576,994(16,351)(3,234)(39,252)7,680(51,157)(12,813)(2,902)(9,301)8,208(16,808)(20,831)(1,713)(11,331)17,511(16,364)(18,190)(18,407)(36,597)(22,881)(18,130)(41,011)(20,723)(17,825)(38,548)Increase (decrease) in cash and cash equivalents(37,364)24,98622,082115,97690,990$78,612$115,976Cash and cash equivalents at end of yearSupplemental cash flow informationIncome taxes paid$16,906$20,586Interest paid$38$49Stock dividend issued$47,053$46,683(The accompanying notes are an integral part of these statements.)68,908$90,990Cash and cash equivalents at beginning of year$22,364$182$32,538Five Year Summary of Earning and Financial HightlightsTOOTISE ROLL. INDUSTRY, INC. AND SUBSIDIARIES(Thousands of dollars except per share, percentage and ratio figures)20112010200920082007Sales and EarningsDataNet product sales$528,369$517,149$495,592$492,051$492,742Product gross margin163,144167,815175,817158,055165,456Interest expenses121142243378535Provision for income16,97420,0059,89216,34725,401taxesNet earnings43,93853,06353,15738,88052,175% of net product8.3%10.3%10.7%7.9%10.6%sales% of shareholders’6.6%8.0%8.1%6.1%8.1%equityPer Common ShareDataNet earningsCash dvidends$0.76http://edugen.wiley.com/edugen/shared/assignment/test/qprint.uni$0.90$0.89$0.65$0.853/511/15/2015Broadening Your Perspective 8­1declared0.32Stock dividendsAdditional FinancialDataWorking capitalNet cash provided byopreating activitiesNet cash provided by(used by) investingactivitiesNet cash used infinancing activitiesProperty, plant &equipmentadditionsNet property, plant &equipmentTotal assetsLong­term debtShareholders’ equityAverage sharesoutstanding0.323%0.323%3%0.320.323%3%$153,846$176,662$154,409$129,694$142,16350,39082,80576,99457,33390,148(51,157)(16,808)(16,364)(7,565)(43,429)(36,597)(41,011)(38,548)(38,666)(44,842)16,35112,81320,83134,35514,767212,162215,492220,721217,628201,401857,8567,500665,935857,9597,500667,408836,8447,500654,244813,2527,500636,847813,1347,500640,20457,89258,68559,42560,15261,580Notes to Consolidated Financial Statements ($ in thousands)Revenue recognition:Products are sold to customers based on accepted purchase orders which include quantity, salesprice and other relevant terms of sale. Revenue, net of applicable provisions for discounts,returns, allowances and certain advertising and promotional costs, is recognized when productsare delivered to customers and collectability is reasonably assured. Shipping and handling costs of$45,850, $43,034, and $38,628 in 2011, 2010 and 2009, respectively, are included in selling,marketing and administrative expenses. Accounts receivable are unsecured. Revenues from amajor customer aggregated approximately 23.3%, 21.4% and 22.9% of net product sales duringthe years ended December 31, 2011, 2010 and 2009, respectively.SEGMENT AND GEOGRAPHIC INFORMATION:The Company operates as a single reportable segments encompassing the manufacturing andsale of confectionery products. Its principal manufacturing operations are located in the UnitedStates and Canada, and its principal market is in the United States. The Company alsomanufactures and sells confectionery products in Mexico, and exports products to Canada andcountries worldwide.The following geographic data includes net product sales summarized on the basis of thecustomer location and long­lived assets based on their location:201120102009$487,185$471,714$455,51741,18445,43540,075$528,369$517,149$495,592$170,173$172,087$176,04441,98943,40544,677$212,162$215,492$220,721Net product sales:United statesForeignLong­lived assets:United statesForeignhttp://edugen.wiley.com/edugen/shared/assignment/test/qprint.uni4/511/15/2015Broadening Your Perspective 8­1Calculate the accounts receivable turnover and average collection period for 2011. (Use “NetProduct Sales.” Assume all sales were credit sales.) (Round answers to 1 decimal place, e.g.15.2.)Accounts receivable turnover6.1timesAverage collection period60daysQuestion Attempts: 2 of 3 usedCopyright © 2000­2015 by John Wiley & Sons, Inc. or related companies. 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