cpa Canada FA3 第10章作业.docxVIP

LESSON 10 AssignmentQuestion 1 (55 marks)Note:In Question 4 of Assignment 9, you completed an exercise very similar to the first part of this question with respect to preparing projections. This assignment builds upon those skills, requiring you to analyze and comment on the results.Computer questionIn early 2013, Jane Lender, an officer of the Commerce Bank, was evaluating the account of Johnson Lumber Co., which uses a line of credit to manage its seasonal requirements. This year the company needed more than its usual credit limit and, unlike previous years, the account was not paid off. Jane has been asked by her manager to study the account and prepare a report.Jane studied the file and found that the company was managed by professional managers with backgrounds in marketing and production. She also identified that the firm’s profits had been growing steadily, though not spectacularly considering the inflation rate. Jane is aware that her manager will require financial analysis to back up her report. Also, considering the executive attention span, she decided to keep her report brief. The Income Statement and Statement of Financial Position of Johnson Lumber Co. is given below.JOHNSON LUMBER CO.Income Statementfor years ended October 31, 2010-2012(thousands of dollars)201020112012Net sales€9,000€10,500€13,500Cost of goods soldMaterial and labour7,7259,00011,625Overhead180255285Earnings before interest and tax1,0951,2451,590Interest expenses454590Earnings after taxes1,0501,2001,500Taxes at 50%525600750Earnings after tax525600750Dividends390450450Retained earnings€135€150€300The net sales is arrived after a quantity discount of €90, €105, and €160 respectively in 2010, 2011, and 2012. Overhead includes the following depreciation.Plant120135165Equipment526075JOHNSON LUMBER CO.Statement of Financial Positionas at October 31, 2010-2012201020112012ASSETSCash€271€241€121Marketable securities315150Accounts receivable1,4101,5151,785Inventories1,5151,7251,965Total curren