The following accounts balances and other financial information are drawn from the records of the Fenway Company for 2022. Fenway Company 2022 Net sales Revenue 38,800   Depreciation Expense 500 Unearned Revenue 2600   Accumulated Depreciation 1000 Accounts Receivable 8,000   Operating Expenses 4500 Cost of Goods Sold 26,000   Cash – Ending 4400 Inventory 5,000   Land 20000 Accounts Payable 5,800   Beginning Balance Retained Earnings 8500 Notes Payable 6,000   Common Stock 12000 Supplies 50   Cash received from customers 6400 Supplies Expense 750   Purchased Office Equipment 2500 Office Equipment 3,500   Received Cash from Issuing Stock 3000           Paid Cash for Dividends 2000           Paid Cash for Operating Expenses 1000   Instructions As the Chief Financial Officer (CFO) of a publicly traded company you are charged with evaluating companies in a similar industry as your own for acquisition. The President of the corporation has requested that you evaluate the overall financial health of the Fenway Company and report to the Board of Directors whether or not you should purchase the Fenway Company. In connection with this endeavor, provide responses to the following short answer and essay questions. Requirements 1-Calculate the Net Income for the Fenway Company ___________ 2-Calculate the Gross Profit for the Fenway Company ___________ 3-Calculate the Cash Flow from Operations for the Fenway Company ___________ 4-Calculate the Total Assets for the Fenway Company ___________ 5-Calculate the Total Liabilities for the Fenway Company ___________ 6-Using knowledge from other business courses (e.g., Economics, Management, Marketing and Finance) provide three questions that you would ask the Fenway Company to consider in your acquisition decision in addition to the information computed above. 7-From your analysis of the financial information included in the problem, state whether you would or would not recommend purchasing the Fenway Company and write a short paragraph stating your reasons.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Question1

The following accounts balances and other financial information are drawn from the records of the Fenway Company for 2022.

Fenway Company 2022

Net sales Revenue

38,800

 

Depreciation Expense

500

Unearned Revenue

2600

 

Accumulated Depreciation

1000

Accounts Receivable

8,000

 

Operating Expenses

4500

Cost of Goods Sold

26,000

 

Cash – Ending

4400

Inventory

5,000

 

Land

20000

Accounts Payable

5,800

 

Beginning Balance Retained Earnings

8500

Notes Payable

6,000

 

Common Stock

12000

Supplies

50

 

Cash received from customers

6400

Supplies Expense

750

 

Purchased Office Equipment

2500

Office Equipment

3,500

 

Received Cash from Issuing Stock

3000

         

Paid Cash for Dividends

2000

         

Paid Cash for Operating Expenses

1000

 

Instructions

As the Chief Financial Officer (CFO) of a publicly traded company you are charged with evaluating companies in a similar industry as your own for acquisition. The President of the corporation has requested that you evaluate the overall financial health of the Fenway Company and report to the Board of Directors whether or not you should purchase the Fenway Company. In connection with this endeavor, provide responses to the following short answer and essay questions.

Requirements

1-Calculate the Net Income for the Fenway Company ___________

2-Calculate the Gross Profit for the Fenway Company ___________

3-Calculate the Cash Flow from Operations for the Fenway Company ___________

4-Calculate the Total Assets for the Fenway Company ___________

5-Calculate the Total Liabilities for the Fenway Company ___________

6-Using knowledge from other business courses (e.g., Economics, Management, Marketing and Finance) provide three questions that you would ask the Fenway Company to consider in your acquisition decision in addition to the information computed above.

7-From your analysis of the financial information included in the problem, state whether you would or would not recommend purchasing the Fenway Company and write a short paragraph stating your reasons.

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Is there an answer for questions 4,5,6, and 7 of the problem above? 

Total Assets? Total Liabilities? 

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