tutorial_5 - P5-5 TOMMY HILFIGER CORPORATION Consolidated...

P5-5.
TOMMY HILFIGER CORPORATION
Consolidated Statement of Income
For Year Ended March 31, Current Year
In Thousands Except Per Share Amounts
Net revenue $1,875,797
Cost of goods sold 1,012,156
Gross profit 863,641
Depreciation and amortization 76,307
Other selling, general and administrative expenses 583,502
Total operating expenses 659,809
Operating income 203,832
Interest expense 31,756
Interest income 3,577
Income before income taxes 175,653
Provision for income taxes 37,445
Net income $138,208
Earnings per share:
Basic earnings per share $1.52
Weighted average shares outstanding 90,692
P5-7.
Req. 1.
Transaction Gross Profit Operating Income
(Loss)
Return on Equity
a. + + +
b. NE – –
c. NE NE –
d. NE NE +
The effects of the transactions can be seen by making the related journal entries and
using CA, CL, SE, R, and E to denote current asset, current liability, shareholders’
equity, revenue, and expense, respectively.

a.* Accounts receivable (+CA) ............................................................ 500
Sales revenue (+R) ................................................................... 500
Cost of goods sold (+E) ................................................................. 475
Inventory (–CA) ......................................................................... 475
*Note that net income goes up by $25 as does ending stockholders’ equity. As a