ACCY 500: Accounting Measurement, Reporting and Control

Group Assignment 3
Group Name:
Student Names:

Part I: Shareholders’ Equity of Dollar General Corporation

Dollar General operates a chain of discount variety stores. It has over 16,000 locations across
the United States. Using the Consolidated Statements of Shareholders’ Equity provided on
the next page, answer the following questions. Amounts reported are in $ thousands, except
per share amounts.

1. How many shares did Dollar General have outstanding at the beginning of the fiscal year
ended January 29, 2021?

251,936 (in thousands) shares

2. How many shares did Dollar General have outstanding at the end of the fiscal year ended
January 29, 2021? What explains the change in the number of shares outstanding during
the year?

240,785 (in thousands) shares. The number of outstanding shares decreased, largely
as a result of stock repurchases.

3. What is the nominal value of each share of common stock?

Nominal value = Total value of common stock / Number of common stock shares
Nominal value = 220,444,000 / 251,936,000 (using opening balance of Jan 31, 2020)

Nominal value = $0.875

4. How many shares of common stock did Dollar General repurchase during fiscal year
ended January 29, 2021?

12,297 (in thousands) shares

5. What was the average price per share that Dollar General paid to repurchase shares during
fiscal year ended January 29, 2021?

Avg price per share paid = Total paid / Shares repurchased

Avg price per share paid = 2,466,434,000 / 12,297,000

Avg price per share paid = $200.57

6. If Dollar General had not declared dividends for the fiscal year ended January 29, 2021,
would net income have been higher, lower or the same as reported?

Net income would have been higher, if dividends had not been declared.

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Part II: Shareholders’ Equity of National Beverage Corp.

National Beverage Corp. is an American beverage developer, manufacturer, and distributor

based in Fort Lauderdale, Florida, focused on flavored soft drinks such as La Croix. Using
the attached excerpts from the company’s 2020 Annual Report answer the following
questions. Please note:
- All numbers, except share data, are presented in $ thousands.
- Provide calculations when necessary.

1. Shares Issued and Outstanding

(a) How many shares of common stock were authorized at fiscal year-end 2020? How
many had been issued as of fiscal year-end 2020?

200,000,000 shares authorized. 50,803,184 shares issued.

(b) National Beverage has repurchased some of its own common shares that had been
previously issued (Treasury Stock). How many common shares did National Beverage
hold as treasury stock at the end of 2020?

4,187,056 shares

(c) How many total shares were outstanding at fiscal year-end 2020?

Shares outstanding = Issued shares of common stock – Treasury of common stock

Shares outstanding = 50,803,184 – 4,187,056

Shares outstanding = 46,616,128

2. Common Stock

(a) What is the par value of each share of common stock issued?

$0.01

(b) How much money in excess of the par value of the stock had been contributed by
common shareholders by the end of 2020?

$37,930 (in thousands)

(c) How much did National Beverage pay for Treasury Stock of all common shares it
held at fiscal year-end 2020?

$19,133 (in thousands)

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3. Transactions related to Shareholders’ Equity
For each activity below, provide the accounting entry made by National Beverage (with
amounts):

(a) Record the declaration and payment of dividends for the fiscal year ended April 27,
2019.

Assets Liabilities Shareholders’ Equity

Cash Dividends Payable Retained Earnings
Dividends declared 135,247 (135,247)
Dividends paid (135,247) (135,247)

(b) Record the purchase of common shares for the fiscal year ended May 2, 2020.

Assets Liabilities Shareholders’ Equity

Cash Treasury Stock
Repurchase (6,233) (6,233)

4. Preferred Stock

(a) What is the par value of each share of preferred stock issued?

$1

(b) How much did National Beverage pay for Treasury Stock of preferred shares it held at
fiscal year-end 2020?

$150 (in thousands)

5. Earnings per Share

(a) What is Basic Earnings per Share for 2020?

$2.79

(b) What is Diluted Earnings per Share for 2020?

$2.78

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Part III: Cash Flows Statement of Starbucks Corporation

Please find the Consolidated Statements of Earnings and the Consolidated Statements of Cash
Flows for Starbucks Corporation below. Use the information contained in those financial
statements to answer the following questions.

1. What is the amount of inventory purchases made by Starbucks during fiscal year 2020?

$10.9 (in millions) (This is cash purchases… what about inventory purchases on credit?)

2. Assuming that the entire balance of accounts payable relates to suppliers of inventory,
how much did Starbucks pay to its inventory suppliers during fiscal year 2020?

Paid amount = Paid for credit (“Accounts Payable”) + Paid in cash (“Inventories”)
Paid amount = 210.8 + 10.9

Paid amount = $221.7 (in millions)

3. For purposes of calculating net cash provided by operating activities, “Deferred revenue”
is added to net earnings for fiscal year 2020 but subtracted from net earnings for fiscal
year 2019. Please explain what is represented by the activity for each year.

Net earnings only relate to services that have been rendered.

2020: More prepayments were collected for services that have not yet been rendered
during this fiscal year. Thus, while not a part of net earnings, these can be added to
the net cash.

2019: More services were rendered this year based on prepayments that were
already collected earlier. Thus, while these should be reflected in the net earnings,
the prepayments must be subtracted from this year’s cash flow.

4. What was the net book value of the investments sold during fiscal year 2020? Assume
that Starbucks recorded gains of $6 (million) on the sale of investments during the year.

NBV = Proceeds + Loss

NBV = Proceeds – Gain
NBV = 186.7 – 6

NBV = $181.7 (in millions)

5. Starbucks is currently using a straight-line depreciation policy. If Starbucks were to use

accelerated depreciation what would be the effect on the net cash provided by operating
activities? Would it increase, decrease, or stay the same?

When accelerated depreciation is used, higher depreciation expenses are recognized

in the early years and lower depreciation expenses are recognized later on.

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Regardless of how an asset depreciates, there is no effect on the cash flow. Thus, the
net cash provided by operating activities would stay the same.

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Part IV: Cash Flows Statement of Tootsie Roll Industries, Inc.

Refer to the 2020 Annual Report of Tootsie Roll Industries, Inc. to answer the questions in
this part. Consider only the information provided in the Statements of Earnings, Financial
Position (Balance Sheet), and Cash Flows. Amounts are presented in $ thousands. Answer the
following questions.

1. Estimate cash collected from customers during fiscal 2020. Assume that only “Accounts
receivables trade” relates to customers and that product sales are presented net of bad debt
expense.

Cash collected = Net sales – Change in A/R

Cash collected = Net sales – (End A/R – Beginning A/R)
Cash collected = 467,427 – (41,209 – 45,044)

Cash collected = $471,262 (in thousands)

2. Estimate cash paid to suppliers during fiscal 2020. Assume that all accounts payable
relate to suppliers.

Cash paid to suppliers = Cash paid for inventories + Accounts payable of previous year
Cash paid to suppliers = 770 + 12,720

Cash paid to suppliers = $13,490 (in thousands)

3. Assume the Company measures bad debt expenses as 3% of beginning gross accounts
receivables trade. Calculate the amount of bad debts written off during fiscal 2020.

Bad debt expense = Beginning gross A/R * 3%

Bad debt expense = (Beginning net A/R + Beginning A/R allowance)
Bad debt expense = (45,044 + 1,949) * 3%
Bad debt expense = 1409.79

Ending doubtful = Beginning doubtful + Bad debt expense – Write-offs

1,694 = 1,949 + 1409.79 – Write-offs

Write-offs = $1664.79 (in thousands)

4. How much did the Company pay in total cash dividends during fiscal 2020?

$23,810 (in thousands)

5. How much did the Company pay to repurchase shares during fiscal 2020?

$32,055 (in thousands)

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Consolidated Statements of Financial Position (continued)

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