Exercise 7-1 & 7-2

Exercise 7-1

1. The total assets are 499758.76
2. The total capital is 318982.44
3. Indicate the amount of the net income or (net loss) for the month of march (3157.59)
4. The current month’s gross profit is 64719.54
5. The current month’s total expenses are 67877.13

This information shows how much dollar amount of assets and capital along with the expenses and gross profit (or the profit before expenses are deducted) and how much of a net income or loss the company endured for the given month. This information is useful to many different managers, from the inventory manager to the executive managers. Store managers or inventory managers would use this information to determine how much inventory they can buy to replenish stocks or maybe how many labor hours to cut in order to balance out net losses. Executive managers would use this information to track how well the store is doing in general and would compare this report to other months in order to see a pattern that could cause room for concern.

Exercise 7-2

1. The current month’s net cash provided by operations is 34936.57
2. The year to date’s net cash provided by operations is 4717.37
3. The cash balance at end of period for the current month is 32060.92
4. The beginning retained earnings balance is 189037.60
5. The ending retained earnings balance is 213982.44

The information from this exercise shows a bigger picture of how well the company is doing in a given month. Executive managers would use these figures to determine trends in company sales in order to track how well the stores are doing and whether they can afford to expand or if there is a need to cut expenses.