FINANCE CASE STUDY

1. Which of the definitions below qualifies as one that describes the income statement?

A. A report that primarily focuses on a company’s revenues and expenses during a particular period.
B. A report that provides a snapshot of a company’s financials as of a particular date,
C. A report gives an account of how the net revenue realized by the company gets transformed into
net earnings
D. All of the above
E. Statement A & B

2. A financial statement that reports a company's assets, liabilities and shareholders' equity at a specific
point in time, and provides a basis for computing rates of return and evaluating its capital structure.

A. Profit and Loss Statement

B. Cash flow Statement
C. Income Statement
D. Balance Sheet
E. None of the above

3. What are the three factors that can affect your cash flow? And please explain them briefly on your
understanding of each.

4. Please walk us through in your own words the three basic financial statements.

5. If I can only have one statement and wanted to review the overall health of a company, which statement
would I use and why?

6. What happens on the income statement if inventory goes up by $1,231?

7. Please explain on how you would define working capital and how you would calculate it.

8. A short term amounts due from buyers to a seller, who have purchased goods or services from the seller
on credit is referred to as?

A. Purchase
B. Assets
C. Accounts Receivable
D. Accounts Payable
E. Inventory
9. The amount a company owes to its suppliers, its employees, and its partners. In other words, it is the
basic cost levied on the company to run business process that is outstanding.
Purchase
A. Loan
B. Accounts Receivable
C. Accounts Payable
 D. Inventory
E. All of the above

10. Financial Report Case Study - Poor Charlie’s Accounting

Charlie Munkger is the CEO of PT. Charlie Munkger, a tech company operating out of Indonesia. Although
Charlie is a brilliant person and shrewd businessman, Charlie has very limited understanding of the
financials of his company and how his business has been performing for the past year (2018).

Charlie only has the following data at his disposal for you to use:

Net Sales : USD 900,000

COGS : USD 530,000
Selling Expenses : USD 117,000
General Admin Expenses : USD 126,000
Interest Expense : USD 24,000
Income Tax : USD 28,000
Common Stock : USD 420,000
Retained Earnings Begin of year : USD 176,000
Less Dividends : USD 33,000
Cash : USD 38,000
Accounts Receivable : USD 117,000
Inventories : USD 180,000
Supplies : USD 40,000
Prepaid Expense : USD 15,000
Property : USD 560,000
Accounts Payable : USD 25,000
Interest Payable : USD 24,000
Unearned Revenue : USD 48,000
Accrued Expense : USD 15,000
LTL : USD 200,000
Common Stock : USD 420,000
Retained Earnings : USD 218,000
Net Cash provided by Operating Activities : USD 19,000
Purchase of Plant Assets : USD 63,000
Sale of Office Equipment : USD 45,000
Issuance of Common Stock : USD 80,000
Repayment of LTL : USD 50,000
Payment of Dividend : USD 33,000
Net (decrease) in cash : USD 2,000
Cash beginning of year : USD 40,000

In light of the situation and data above, Charlie is currently asking you to help him prepare the basic
financial reports for him which includes:
● Income Statement
● Statement of Stockholders’ Equity
● Balance Sheet, and
● Cashflow Statement