FINANCIAL REPORTING PROBLEM: Tootsie Roll Industries
Answer the following questions.
(b) How much were the accounts payable at December 31, 2004?
(c) What were the components of total current liabilities on December 31, 2004 (other than accounts payable already discussed above)?
Financial Statements and Accompanying Notes
The standard set of financial statements consists of: (1) a comparative income statement for three years, (2) a comparative balance sheet for two years, (3) a comparative statement of cash flows for three years, (4) a statement of retained earnings (or stockholders' equity) for three years, and (5) a set of accompanying notes that are considered an integral part of the financial statements. The auditor's report, unless stated otherwise, covers the financial statements and the accompanying notes. The financial statements and accompanying notes plus some supplementary data and analyses for Tootsie Roll Industries follow.
CONSOLIDATED STATEMENT OF
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
Assets December 31,
Cash and cash equivalents $56,989 $84,084
Investments 32,369 86,961
Accounts receivable trade, less allowances of 28,456 18,131
Other receivables 9,001 3,076
Finished goods and work-in-process 37,384 28,969
Raw materials and supplies 21,393 17,117
Prepaid expenses 5,719 4,416
Deferred income taxes 1,382 951
Total current assets 192,693 243,705
PROPERTY, PLANT AND EQUIPMENT, at cost:
Land 14,973 8,265
Buildings 61,714 44,960
Machinery and equipment 244,367 206,697
Less?Accumulated depreciation 142,304 130,759
Goodwill 74,002 38,151
Trademarks 193,342 79,348
Investments 96,640 112,431
Split dollar officer life insurance 66,094 62,499
Investement in joint venture 10,232 ?
Notes to Consolidated Financial Statements
NOTE 1?SIGNIFICANT ACCOUNTING
Basis of consolidation
The consolidated financial statements include the accounts of Tootsie Roll Industries, Inc. and its wholly-owned subsidiaries (the company), which are primarily engaged in the manufacture and sale of candy products. All significant intercompany transactions have been eliminated.
The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Certain reclassifications have been made to the prior year financial statements to conform to the current year presentation.
Revenue recognition and other accounting pronouncements: Products are sold to customers based on accepted purchase orders which include quantity, sales price and other relevant terms of sale. Revenues are recognized when products
are delivered to customers and collectibility is reasonably assured. Shipping and handling costs of $31,795, $28,217 and $28,579 in 2004, 2003 and 2002, respectively, are included in selling, marketing and administrative expenses. Accounts receivable are unsecured. Revenues from a major customer aggregated approximately 20.8%, 20.6% and 19.6% of total net sales during the years ended December 31, 2004, 2003 and 2002, respectively. In November 2004, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 151, "Inventory Costs?an amendment to ARB No. 43, Chapter 4," which amends guidance in accounting for abnormal amounts of idle facility expense.
The company believes that the pronouncement is generally not applicable to the company's operations and to the extent it may be applicable it is not expected to have a significant impact on the company's consolidated financial statements.
Cash and cash equivalents: The company considers ...
This solution is comprised of a detailed explanation to answer what were Tootsie Roll's total current liabilities at December 31, 2004, what was the increase/decrease in Tootsie Roll's total current liabilities from the prior year, how much were the accounts payable at December 31, 2004, and what were the components of total current liabilities on December 31, 2004.