ASSIGNMENT: From Chapter 2, page 59; answer Jobs vs. Cook case.
Steve Jobs was a strong, charismatic leader who cofounded Apple and is credited with much of the success of the company. Some believe that Tim Cook, who became CEO in 2011, embraces a more collaborative leadership style. Do research to compare and contrast the leadership styles of the two CEOs. (You may wish to view the 2013 movie JOBS, which portrays the story of Steve Jobs’ ascension from college dropout to Apple CEO.) Which CEO—Jobs or Cook—do you think developed and executed the most effective strategic plan? What evidence can you find to support your opinion?
Problem 12-2AA Indirect: Cash flows spreadsheet LO P1, P2, P3, P4
Forten Company, a merchandiser, recently completed its calendar-year 2013 operations. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. The company’s balance sheets and income statement follow.
FORTEN COMPANY Comparative Balance Sheets December 31, 2013 and 2012
Cash $ 49,200 $ 73,000
Accounts receivable 65,890 57,000
Merchandise inventory 276,500 253,000
Prepaid expenses 1,250 1,900
Equipment 158,000 106,500
Accum. depreciation—Equipment (36,500) (46,000)
Total assets $ 514,340 $ 445,400
Liabilities and Equity
Accounts payable $ 63,590 $ 111,000
Short-term notes payable 10,000 6,000
Long-term notes payable 62,500 48,250
Common stock, $5 par value 162,250 150,750
Paid-in capital in excess of par, common stock 34,500 0
Retained earnings 181,500 129,400
Total liabilities and equity $ 514,340 $ 445,400
FORTEN COMPANY Income Statement For Year Ended December 31, 2013
Sales $ 582,500
Cost of goods sold 289,000
Gross profit 293,500
Depreciation expense $ 20,000
Other expenses 134,000 154,000
Other gains (losses)
Loss on sale of equipment (5,500)
Income before taxes 134,000
Income taxes expense 25,500
Net income $ 108,500
Additional Information on Year 2013 Transactions
a. Net income was $108,500.
b. Accounts receivable increased.
c. Merchandise inventory increased.
d. Prepaid expenses decreased.
e. Accounts payable decreased.
f. Depreciation expense was $20,000.
g. Sold equipment costing $46,500, with accumulated depreciation of $29,500, for $11,500 cash. This yielded a loss of $5,500.
h. Purchased equipment costing $98,000 by paying $30,000 cash and (i.) by signing a long-term note payable for the balance.
j. Borrowed $4,000 cash by signing a short-term note payable.
k. Paid $53,750 cash to reduce the long-term notes payable.
l. Issued 2,300 shares of common stock for $20 cash per share.
m. Declared and paid cash dividends of $56,400.
Prepare a complete statement of cash flows using a spreadsheet; report its operating activities using the indirect method. (Enter all amounts as positive v