1. Team Names Date

2. Financial Statements CA24-2 Item 1 The net income for December 31, 2007: $420,000 Beginning Retained Earnings Add: Net Income $570,000 Minus: Cash Dividends 320,000 250,000 Ending Retained Earnings $670,000

3. President’s Letter to Stockholders Item 2 Cash Dividends paid to stockholders. Annual report dividend policy. Financial Statements provided.

4. Financial Statements and Disclosures Financial statement disclosures provide internal and external business stakeholders with additional information regarding a company’s financial operations. Small businesses do not usually have significant disclosures for their financial statements. Larger business organizations often use disclosures to provide additional information to lenders and investors. Disclosures can be required by generally accepted accounting principles or voluntary per management decisions.

5. Financial Statements Item 3 Competitor has produced a line similar to primary line. The competitor’s line will be priced at 50% less than our organization’s primary line

6. Disclosure They should disclose that it plans on reducing the price of the primary line to meet the competitor’s price. They should also, disclose that the lower price will cover selling and manufacturing expenses and only a portion of the fixed costs. This information is important for creditors and investors to know.

7. Financial statement Item 4 The company’s new manufacturing plant building cost $2,400,000 with an estimated life of 25 years. The annual depreciation is $95,999.96 [(2,400,000-1)/25] using the straight line method.

8. References Keiso, D. E., Weygandt, J. J., & Warfield, T. D. (2007). Intermediate Accounting (12th ed.) http://smallbusiness.chron.com/financial-statement- disclosure-checklist-3781.html http://smallbusiness.chron.com/financial-statement- disclosure-checklist-3781.html