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1) Comparative Analysis - Problem 1-9 As a consultant to MSR Company, you are told it is considering the acquisition of Lakeland Corporation. MCR...

Comparative Analysis
1) Comparative Analysis Problem 1-9 As a consultant to MSR Company, you are told it is considering the acquisition of Lakeland Corporation. MCR Company requests that you prepare certain financial statistics and analysis for Year 5 and Year 4 using Lakeland’s financial statements as follows: LAKELAND CORPORATION Balance Sheet December 31, Year 5 and Year 4 Year 5 Year 4 Assets Current assets Cash $1,610,000 $1,387,000 Marketable securities 510,000 Accounts receivable, less allowance for bad debts Year 5, $125,000; Year 4, $110,000 4,075,000 3,669,000 Inventories, at lower of cost or market 7,250,000 7,050,000 Prepaid expenses 125,000 218,000 Total current assets 13,570,000 12,324,000 Plant and equipment, at cost Land and buildings 13,500,000 13,500,000 Machinery and equipment 9,250,000 8,520,000 Total plant and equipment 22,750,000 22,020,000 Less: Accumulated depreciation 13,470,000 12,549,000 Total plant and equipment—net 9,280,000 9,471,000 Long-term receivables 250,000 250,000 Deferred charges 25,000 75,000 Total assets $23,125,000 $22,120,00 0 (continued )
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Liabilities and Shareholders' Equity (continued) Current liabilities Accounts payable $2,950,000 $3,426,000 Accrued expenses 1,575,000 1,644,000 Federal taxes payable 875,000 750,000 Current maturities on long-term debt 500,000 500,000 Total current liabilities 5,900,000 6,320,000 Other liabilities 5% sinking fund debentures, due January 1, Year 16 ($500,000 redeemable annually) 5,000,000 5,500,000 Deferred taxes on income, due to depreciation 350,000 210,000 Total other liabilities 5,350,000 5,710,000 Shareholders' equity Preferred stock, $1 cumulative, $20 par, preference on liquidation $100 per share (authorized: 100,000 shares; issued and outstanding: 50,000 shares) 1,000,000 1,000,000 Common stock, $1 par (authorized: 900,000 shares; issued and outstanding: Year 5,550,000 shares; Year 4, 500,000 shares) 550,000 500,000 Capital in excess of par value on common stock 3,075,000 625,000 Retained earnings 7,250,000 7,965,000 Total shareholders* equity 11,875,000 10,090,000 Total liabilities and shareholders' equity $23,125,000 $22,120,000 LAKELAND CORPORATION Statement of Income and Retained Earnings For Years Ended December 31, Year 5 and Year 4 Year 5 Year 4
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Accounting-8209512(1).xls

1) Comparative Analysis –Problem 1-9 Ques: As a consultant to MSR Company, you are told it is considering the acquisition of Lakeland Corporation. MCR Company requests that you prepare certain...

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