|
 |
- At the beginning of 1999, CanGo purchased the online gaming company. This purchase was for cash, paid for through the proceeds of the IPO and results in goodwill.
- 90% of the online book sales comes from JIT, the other 10% through the inventory which CanGo possesses. 100% of the CD/DVD/MP3 come through CanGo inventory. The result is that 80% of ALL sales is JIT and 20% is inventory.
- There is one warehouse for shipping of books and one plant for manufacturing.
- There are three divisions: a CD/DVD/MP3 division, an online gaming division and a books division. All manufacturing takes place in the CD/DVD/MP3 division.
- The IPO takes place at the beginning of 1999.
- The CD/DVDs were customized beginning in 1998. The MP3 players were built beginning in the start of 1999.
- The online gaming company was purchased for $30,000,000 and both Elizabeth and Andrew initiated the process.
- The company begins in 1996, has a VC infusion in 1997 and 1998. It shows a profit in 1998 and 1999. Its only profitable division is the online book sales division.
- It has some type of international operations, hence the need for a "translation gain or loss" in owner's equity.
- It has an extraordinary loss from fire and a sale of a segment of its business in 1999.
| ASSETS |
December 31, 1999 |
December 31, 1998 |
| Cash |
$20,900,000 |
|
| Marketable Securities |
$117,000,000 |
|
| Accounts Receivable |
$33,000,000 |
|
| Less: Allowance for Bad Debts |
$(880,000) |
|
| Net Accounts Receivable |
$32,120,000 |
|
| |
|
|
| Inventory |
|
|
| Raw Materials |
$2,000,000 |
|
| Work-in-process |
$1,000,000 |
|
| Finished Goods |
$5,000,000 |
|
| Inventory Purchased for Resale |
$24,000,000 |
|
| Total Inventory |
$32,000,000 |
|
| |
|
|
| Plant, Property and Equipment |
$6,700,000 |
|
| Less: Accumulated Depreciation |
$(320,000) |
|
| Net Plant, Property and Equipment |
$6,380,000 |
|
| |
|
|
| Prepaid Expenses |
$200,000 |
|
| |
|
|
| Goodwill and Other Purchased Intangibles |
$28,000,000 |
|
| Less: Amortization |
$(700,000) |
|
| Net Goodwill and Other Purchased Intangibles |
$27,300,000 |
|
| |
|
|
| Total Assets |
$235,900,000 |
|
| |
| LIABILITIES AND OWNERS' EQUITY |
| Accounts Payable |
$22,000,000 |
|
| Accrued Advertising |
$11,800,000 |
|
| Other Liabilities and Accrued Expense |
$1,400,000 |
|
| Current Portion of Long-Term Debt |
$2,300,000 |
|
| |
|
|
| Long Term Debt |
$57,400,000 |
|
| |
|
|
| Preferred Stock, $100 par value per share, |
|
|
| 100,000 authorized, 0 shares issued and outstanding |
$0 |
|
| |
|
|
| Common Stock, $1 par value per share, |
|
|
| 250,000,000 shares authorized, 13,000,000 shares |
|
|
| issued, 12,900,000 outstanding |
$13,000,000 |
|
| |
|
|
| Additional Paid-in-Capital in excess of par value, Common Stock |
$117,000,000 |
|
| |
|
|
| Treasury Stock |
$(1,000,000) |
|
| |
|
|
| Retained Earnings (less Cash Dividends Paid) |
$12,000,000 |
$11,000,000 |
| |
|
|
| Total Liabilities and Owner's Equity |
$235,900,000 |
|
| |
December 31, 1999 |
December 31, 1998 |
| Sales Revenues |
$51,000,000 |
$10,300,000 |
| Less: Sales Returns |
$(1,000,000) |
$(300,000) |
| Net Sales Revenues |
$50,000,000 |
$10,000,000 |
| Less: Cost of Goods Sold |
$(9,000,000) |
$(4,000,000) |
| Gross Profit |
$41,000,000 |
$6,000,000 |
| |
|
|
| Operating Expenses: |
|
|
| Advertising and Sales |
$(26,000,000) |
$(3,000,000) |
| Depreciation |
$(160,000) |
|
| Salaries and Wages |
$(1,700,000) |
$(1,400,000) |
| Product Development |
$(4,000,000) |
$(1,200,000) |
| Merger and Acquisition Related Costs, including |
|
|
| Amortization of Goodwill and Other Intangibles |
$(700,000) |
$0 |
| Total Operating Expenses |
$(32,560,000) |
|
| |
|
|
| Income from Continuing Operations Before Income Taxes |
$8,440,000 |
|
| |
|
|
| Less: Income Taxes at 35% |
$(2,954,000) |
|
| Income from Continuing Operations |
$5,486,000 |
|
| |
|
|
| Discontinued Operations: |
|
|
| Income from Operations of Discontinued Division |
|
|
| (less applicable income taxes) |
$350,000 |
|
| Loss on Disposal of Discontinued Division |
|
|
| (less applicable income taxes) |
$(150,000) |
|
| Total Gain from Discontinued Operations |
$200,000 |
|
| |
|
|
| Extraordinary Items: |
|
|
| Loss from fire (less applicable income taxes) |
$(200,000) |
|
| |
|
|
| Net Income |
$5,486,000 |
|
| |
| Divisional Revenues |
| Books |
$15,000,000 |
$7,000,000 |
| Online gaming |
$25,000,000 |
|
| Customized MP3/CD/DVD |
$10,000,000 |
$3,000,000 |
| Customized MP3/CD/DVD Inventory at end of 1999 |
$8,000,000 |
|
CanGo, Inc. is a fictional Internet company that exists to support the Mastering Series project.
© 2002 by Prentice-Hall, Inc.
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