ARE 2210 || SARE 460: ESSENTIALS FOR ACCOUNTING AND BUSINESS ||FUNDAMENTALS OF
ACCOUNTING AND MANAGEMENT FOR THE AGRIBUSINESS FIRM
DEPARTMENT OF AGRICULTURAL AND RESOURCE ECONOMICS
FALL 2022
Problem Set 5
Due: Monday, December 12, 2022, by 11:59pm
Answer Key will be posted on Wednesday, December 14, 2022.
Instructions:
•
•
“ubmit one pdf document via HuskyCT.
Include your first and last name in the document. Also, name the document with your first and
last name, for example: Eniola_Fasola.pdf
Check syllabus for late submission policy.
List reference
As noted in the syllabus- You can form study groups to work on the problem sets. But a direct copy
and paste of another studentàwork will be considered a violation of academic integrity and will
not be graded. Therefore, each student is expected to submit their own problem-set solution.
Total Points Possible: 50 points
1) The following is the income statement for the year ended December 31, 2021, for Komaro
Manufacturing Company and its comparative balance sheet for December 31, 2020, and 2021.
Komaro Manufacturing Company
Income Statement for the Year Ending December 31, 2021
$
Sales revenue
Cost of goods sold
Gross profit
Depreciation expense
Other expenses
$
76,450
(40,740)
35,710
(8,240)
(19,000)
(27,240)
8,470
(2,076)
6,394
Income before income taxes
Income tax expense
Net Income
Komaro Manufacturing Company
Comparative Balance Sheets (partial)
Account receivable
Inventory
Prepaid expenses
Account payable
Salaries payable
Taxes payable
2020
$
32,590
23,100
13,970
39,870
22,030
12,490
2021
$
34,090
35,020
11,340
44,960
17,440
11,230
Prepare ONLY the operating section of the statement of cash flows using the indirect method.
2) Using the financial statements and information below, prepare the statement of cash flows using the
indirect method. (Note: This is different from the class exercise or the question above, where you
prepared only the operating section using the indirect method).
3) The financial information for Keta Inc. is presented below:
December 31, 2022
December 31, 2021
Plant assets
Current assets
Retained earnings
Common stock, $1 par
Current liabilities
Long-term liabilities
$
396,000
125,000
136,000
161,000
91,000
133,000
$
330,000
100,000
150,000
115,000
70,000
95,000
a) You are expected to prepare the Balance sheet for Keta Inc. as of December 31, 2021, and 2021, and
perform a comparative analysis using horizontal analysis.
b) What can you say about the financial health of the company through this comparative analysis?
4) The financial information for Blossom Flower Shop is presented below:
Net income
Administrative expenses
Net sales
Salary and wage expense
Cost of goods sold
Income tax expense
December 31, 2022
$
84,000
60,000
750,000
105,000
465,000
36,000
December 31, 2021
$
63,000
54,000
600,000
66,000
390,000
27,000
a) You are expected to prepare the Income Statement for Blossom Flower Shop for the year ending
December 31, 2021, and 2022, and perform a comparative analysis using vertical analysis
b) What can you say about the financial health of the company through this comparative analysis?

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