For Case AP3-2
1. For the most recent year, what amount does American Eagle report for current assets? What assets are listed as current assets? What is the ration of current assets to total assets?
Current Assets: $1,167,030
* Cash and cash equivalents
* Short-term investments
* Merchandise inventory
* Accounts receivable
* Prepaid expenses and other
* Deferred income taxes
Ratio of current assets to total assets: 0 .55
2. For the most ...view middle of the document...
3. List any current assets or current liabilities that likely relate to adjusting entries.
Current Assets: prepaid expenses and other
Prepaid expenses, accrued liabilities
Current Liabilities: accrued compensation and payroll taxes, accrued rent, accrued income and other taxes, other liabilities and accrued expenses
Depreciation, accrued revenues, unearned revenues, accrued expenses.
4. What is the change in retained earnings reported in the balance sheet?
Change in retained earnings: $88,226
5. For the most recent year, what is the amount of net income reported in the income statement?
Net income: $169,022
6. Using your answers in 4 and 5, calculate the amount of dividends paid during the year. Verify your answer by looking at the retained earnings column in the statement of stockholders’ equity.
Dividends paid: $99,134