Trial BalanceChester, Inc.Trial Balances for years ending December 31, 2013, 2014 and 2015Account Description201320142015Cash on Hand$2,483$2,459$2,511Checking Account - Operating247,646252,858243,892MMKT Accounts806,288983,1611,205,563Investments - Trading6,935,7126,850,1986,978,923Accounts Receivable20,513,62856,472,09149,042,528Allowance for Doubtful Accounts(1,578,525)(2,387,691)(2,942,552)Other Receivables01,400,0001,200,000Inventory23,531,50775,351,47165,990,780Reserve for Inventory Obsolescence(3,765,000)(12,136,103)(10,558,525)Prepaid Insurance1,829,1432,830,4742,667,722Prepaid Rent250,000- 0- 0Office Supplies9,2599,5659,182Land146,250131,040131,040Buildings and Land Improvements779,882698,775833,775Machinery, Equipment, Office Furniture541,5223,280,5893,280,589Accum. Depreciation(205,000)(786,102)(1,403,257)Other Noncurrent Assets67,301- 0- 0Accounts Payable(8,934,591)(19,488,866)(12,850,648)Wages Payable(36,838)(264,513)(198,384)FICA Employee Withholding(1,648)(9,452)(7,089)Medicare Withholding(730)(12,785)(9,589)Federal Payroll Taxes Payable(7,541)(132,256)(99,192)State Payroll Taxes Payable(3,519)(61,630)(46,200)FICA Employer Withholding(1,648)(9,452)(7,089)Medicare Employer Withholding(730)(12,785)(9,589)Income Taxes Receivable/Payable0(3,205,440)(6,011,540)Line of Credit(12,500,000)(52,231,360)(47,481,737)Current Portion LT Note Payable0(677,640)(721,480)Interest payable0(470,311)(568,429)Bonuses payable0(504,000)(459,000)Dividend payable(6,000,000)(15,250,000)(15,000,000)Long-Term Note Payable(12,762,360)(12,040,880)Common Stock(10,131,250)(10,131,250)(10,131,250)Paid-in Capital(9,278,750)(9,278,750)(9,278,750)Retained Earnings (Beginning Balance)(2,773,900)Dividends 6,000,00015,250,00015,000,000Sales (307,716,148)(271,839,067)(288,876,206)Sales Returns5,621,97912,432,24723,110,096Income from Investments(665,079)(658,672)(549,387)Unrealized (Gains) and Losses - Investments64,28885,514(128,725)Interest Income(255,379)(147,707)(142,168)Cost of Goods Sold 176,961,437161,029,981179,103,248Administrative Wages Expense21,094,13218,344,39919,706,506Advertising Expense1,121,4251,161,2761,058,391Auto Expenses261,218235,763214,001Bad Debt Expense2,028,0325,875,40313,900,800Bonus Expense0504,000459,000Depreciation Expense166,250581,102617,155Freight5,378,6894,749,0954,325,068Insurance Expense1,067,4281,045,085951,774Legal and Professional Expense4,506,41711,037,0398,987,069Maintenance Expense76,42096,02087,641Miscellaneous Office Expense21,27927,80325,390Payroll Tax Expense1,938,7361,767,1491,609,342Pension/Profit-Sharing Plan Ex3,750,0003,696,0003,366,000Phone95,46757,91153,651Postal160,04287,14079,360Property Tax Expense100,619110,252101,319Rent or Lease Expense3,254,3571,370,2732,230,615Research and Development38,639,554532,4253,080,313Utilities169,554170,765155,600Warehouse Salaries5,791,7305,848,1205,270,689Warranty Expense1,375,3521,297,1041,422,381Interest Expense1,093,7503,373,0562,942,147Income Tax Expense - Federal2,956,25014,14 ...

1. Trial BalanceChester, Inc.Trial Balances for years ending
December 31, 2013, 2014 and 2015Account
Description201320142015Cash on
Hand$2,483$2,459$2,511Checking Account -
Operating247,646252,858243,892MMKT
Accounts806,288983,1611,205,563Investments -
Trading6,935,7126,850,1986,978,923Accounts
Receivable20,513,62856,472,09149,042,528Allowance for
Doubtful Accounts(1,578,525)(2,387,691)(2,942,552)Other
Receivables01,400,0001,200,000Inventory23,531,50775,351,47
165,990,780Reserve for Inventory
Obsolescence(3,765,000)(12,136,103)(10,558,525)Prepaid
Insurance1,829,1432,830,4742,667,722Prepaid Rent250,000- 0-
0Office
Supplies9,2599,5659,182Land146,250131,040131,040Buildings
and Land Improvements779,882698,775833,775Machinery,
Equipment, Office Furniture541,5223,280,5893,280,589Accum.
Depreciation(205,000)(786,102)(1,403,257)Other Noncurrent
Assets67,301- 0- 0Accounts
Payable(8,934,591)(19,488,866)(12,850,648)Wages
Payable(36,838)(264,513)(198,384)FICA Employee
Withholding(1,648)(9,452)(7,089)Medicare
Withholding(730)(12,785)(9,589)Federal Payroll Taxes
Payable(7,541)(132,256)(99,192)State Payroll Taxes
Payable(3,519)(61,630)(46,200)FICA Employer
Withholding(1,648)(9,452)(7,089)Medicare Employer
Withholding(730)(12,785)(9,589)Income Taxes
Receivable/Payable0(3,205,440)(6,011,540)Line of
Credit(12,500,000)(52,231,360)(47,481,737)Current Portion LT
Note Payable0(677,640)(721,480)Interest
payable0(470,311)(568,429)Bonuses
payable0(504,000)(459,000)Dividend
payable(6,000,000)(15,250,000)(15,000,000)Long-Term Note
Payable(12,762,360)(12,040,880)Common

2. Stock(10,131,250)(10,131,250)(10,131,250)Paid-in
Capital(9,278,750)(9,278,750)(9,278,750)Retained Earnings
(Beginning Balance)(2,773,900)Dividends
6,000,00015,250,00015,000,000Sales
(307,716,148)(271,839,067)(288,876,206)Sales
Returns5,621,97912,432,24723,110,096Income from
Investments(665,079)(658,672)(549,387)Unrealized (Gains) and
Losses - Investments64,28885,514(128,725)Interest
Income(255,379)(147,707)(142,168)Cost of Goods Sold
176,961,437161,029,981179,103,248Administrative Wages
Expense21,094,13218,344,39919,706,506Advertising
Expense1,121,4251,161,2761,058,391Auto
Expenses261,218235,763214,001Bad Debt
Expense2,028,0325,875,40313,900,800Bonus
Expense0504,000459,000Depreciation
Expense166,250581,102617,155Freight5,378,6894,749,0954,32
5,068Insurance Expense1,067,4281,045,085951,774Legal and
Professional
Expense4,506,41711,037,0398,987,069Maintenance
Expense76,42096,02087,641Miscellaneous Office
Expense21,27927,80325,390Payroll Tax
Expense1,938,7361,767,1491,609,342Pension/Profit-Sharing
Plan
Ex3,750,0003,696,0003,366,000Phone95,46757,91153,651Posta
l160,04287,14079,360Property Tax
Expense100,619110,252101,319Rent or Lease
Expense3,254,3571,370,2732,230,615Research and
Development38,639,554532,4253,080,313Utilities169,554170,7
65155,600Warehouse
Salaries5,791,7305,848,1205,270,689Warranty
Expense1,375,3521,297,1041,422,381Interest
Expense1,093,7503,373,0562,942,147Income Tax Expense -
Federal2,956,25014,142,2407,269,540Income Tax Expense -
State536,2502,503,2001,258,000Loss on Legal
Settlement23,965,000- 0- 0
Income StatementUse this worksheet to prepare a Multi-step

3. Income Statement to include EPSChester,
Inc.201320142015Sales
307,716,148271,839,067288,876,206Sales
Returns5,621,97912,432,24723,110,096Net
Sales302,094,169259,406,820265,766,110Cost of Goods Sold
176,961,437161,029,981179,103,248Gross
Profit125,132,73298,376,83986,662,862Operating
ExpenseAdministrative Wages
Expense21,094,13218,344,39919,706,506Advertising
Expense1,121,4251,161,2761,058,391Auto
Expenses261,218235,763214,001Bad Debt
Expense2,028,0325,875,40313,900,800Bonus
Expense0504,000459,000Depreciation
Expense166,250581,102617,155Freight5,378,6894,749,0954,32
5,068Insurance Expense1,067,4281,045,085951,774Legal and
Professional
Expense4,506,41711,037,0398,987,069Maintenance
Expense76,42096,02087,641Miscellaneous Office
Expense21,27927,80325,390Payroll Tax
Expense1,938,7361,767,1491,609,342Pension/Profit-Sharing
Plan
Ex3,750,0003,696,0003,366,000Phone95,46757,91153,651Posta
l160,04287,14079,360Property Tax
Expense100,619110,252101,319Rent or Lease
Expense3,254,3571,370,2732,230,615Research and
Development38,639,554532,4253,080,313Utilities169,554170,7
65155,600Warehouse
Salaries5,791,7305,848,1205,270,689Warranty
Expense1,375,3521,297,1041,422,381 Total Operating
Expenses90,996,70158,594,12467,702,065Income Before Other
Gains and Losses34,136,03139,782,71518,960,797 Other Gains
and LossesInterest Expense1,093,7503,373,0562,942,147Income
from Investments(665,079)(658,672)(549,387)Unrealized
(Gains) and Losses - Investments64,28885,514(128,725)Interest
Income(255,379)(147,707)(142,168) Total Other Gains and
Losses237,5802,652,1912,121,867 Income before Income

4. tax33,898,45137,130,52416,838,930Income tax expensesIncome
Tax Expense - Federal2,956,25014,142,2407,269,540Income
Tax Expense - State536,2502,503,2001,258,000 Net
Income30,405,95120,485,0848,311,390Loss on Legal
Settlement23,965,00000 Income transferred to Retained
earnings6,440,95120,485,0848,311,390Number of Shares in
common stock875,000875,000875,000Earnings per
share$34.75$23.41$9.50Check Figures:2015 Net Income$
8,311,390$ -2014 Gross Profit$ 98,376,839$ -2013 Total
Expenses$ 90,996,701$ -Chester, Inc.Income StatementYear
Ended December 31, Account Descripation201320142015Sales
RevenueSales 307,716,148271,839,067288,876,206Less: Sales
Return5,621,97912,432,24723,110,096Net
Sales302,094,169259,406,820265,766,110Cost of Goods Sold
176,961,437161,029,981179,103,248Gross
Profit125,132,73298,376,83986,662,862Selling & Admin
Expenses90,996,70158,594,12467,702,065Income from
Operations34,136,03139,782,71518,960,797Other Income and
expenseIncome from
Investments(600,791)(573,158)(678,112)Interest
Income(255,379)(147,707)(142,168)Interest
Expense1,093,7503,373,0562,942,147Loss on Legal
Settlement23,965,000 Income before Income
tax9,933,45137,130,52416,838,930Income Tax Expense -
Federal2,956,25014,142,2407,269,540Income Tax Expense -
State536,2502,503,2001,258,000 Net
Income6,440,95120,485,0848,311,390Number of
shares875,000875,000875,000Earnings per
share$7.36$23.41$9.50Check Figures:2015 Net Income$
8,311,3902014 Gross Profit$ 98,376,8392013 Total Expenses$
90,996,701
Statement of Retained EarningsUse this worksheet to complete a
Statement of Retained EarningsChester,
Inc.201320142015Common
Stock101312501013125010131250Paid-in
Capital927875092787509278750Retained Earnings (Beginning

5. Balance)277390032148518449935Add: Net
Income6,440,95120,485,0848,311,39028,624,85143,109,93536,
171,325Less: Dividend
paid6,000,00015,250,00015,000,000Balance -
Ending22,624,85127,859,93521,171,325Check Figures:2015
Shareholders' Equity$ 21,171,3252014 Shareholders' Equity$
27,859,9352013 Shareholders' Equity$ 22,624,851Chester,
Inc.Staement of Retained EarningsBalance - January 1,
2013$2,773,900Add: Net Income$6,440,951$9,214,851Less:
Cash Dividends$6,000,000Balance - December 31,
2013$3,214,851Add: Net Income$20,485,084$23,699,935Less:
Cash Dividends$15,250,000Balance - December 31,
2014$8,449,935Add: Net Income$8,311,390$16,761,325Less:
Cash Dividends$15,000,000Balance - December 31,
2015$1,761,325Check Figures:2015 Shareholders' Equity$
21,171,3252014 Shareholders' Equity$ 27,859,9352013
Shareholders' Equity$ 22,624,851
Balance SheetUse this worksheet to complete a Classified
Balance SheetChester, Inc.201320142015AssetsCurrent
AssetsCash on Hand248324592511Checking Account -
Operating247646252858243892MMKT
Accounts8062889831611205563Investments -
Trading693571268501986978923Accounts
Receivable205136285647209149042528Allowance for Doubtful
Accounts-1578525-2387691-2942552Other
Receivables014000001200000Inventory23531507753514716599
0780Reserve for Inventory Obsolescence-3765000-12136103-
10558525Prepaid Insurance182914328304742667722Prepaid
Rent25000000Office Supplies925995659182 Total Current
Assets48782141129628483113840024Property, Plant &
EquipmentLand146250131040131040Buildings and Land
Improvements779882698775833775Machinery, Equipment,
Office Furniture54152232805893280589Accum. Depreciation-
205000-786102-1403257Other Noncurrent Assets6730100 Total
Property, Plant & Equipment132995533243022842147Total
Assets50112096132952785116682171Liabilities and

6. Stockholder's Equity201320142015Accounts
Payable8,934,59119,488,86612,850,648Wages
Payable36,838264,513198,384FICA Employee
Withholding1,6489,4527,089Medicare
Withholding73012,7859,589Federal Payroll Taxes
Payable7,541132,25699,192State Payroll Taxes
Payable3,51961,63046,200FICA Employer
Withholding1,6489,4527,089Medicare Employer
Withholding73012,7859,589Income Taxes
Receivable/Payable03,205,4406,011,540Line of
Credit12,500,00052,231,36047,481,737Current Portion LT Note
Payable0677,640721,480Interest
payable0470,311568,429Bonuses
payable0504,000459,000Dividend
payable6,000,00015,250,00015,000,000 Total Current
Liabilities274872459233049083469966Long term
LiabilitiesLong-Term Note Payable012,762,36012,040,880
Total Liabilities27,487,245105,092,85095,510,846Stockholder's
EquityCommon Stock10,131,25010,131,25010,131,250Paid-in
Capital9,278,7509,278,7509,278,750Retained Earnings
(Beginning Balance)3,214,8518,449,9351,761,325 Total
Stockholder's Equity22,624,85127,859,93521,171,325Total
Liabilities and Stockholder's
Equity50,112,096132,952,785116,682,171000Check
Figures:2015 Total Current Assets$ 113,840,024$ -2014
Current Liabilities$ 92,330,490$ -2013 Total Assets$
50,112,096$ -
Statement of Cash FlowsUse this Worksheet to complete a
Statement of Cash FlowsChester, Inc.201320142015Cash Flow
from Operating Activities Net
Income30,405,95120,485,0848,311,390Adjustments to reconcile
net income to net cash flow from operating
activities:Depreciation
Expense166,250581,102617,155Decrease (Increase) in current
AssetsMMKT
Accounts(806,288)(176,873)(222,402)Investments -

7. Trading(6,935,712)85,514(128,725)Accounts
Receivable(20,513,628)(35,958,463)7,429,563Allowance for
Doubtful Accounts1,578,525809,166554,861Other
Receivables0(1,400,000)200,000Inventory(23,531,507)(51,819,
964)9,360,691Reserve for Inventory
Obsolescence3,765,0008,371,103(1,577,578)Prepaid
Insurance(1,829,143)(1,001,331)162,752Prepaid
Rent(250,000)250,0000Office
Supplies(9,259)(306)383Accounts
Payable8,934,59110,554,275(6,638,218)Wages
Payable36,838227,675(66,129)FICA Employee
Withholding1,6487,804(2,363)Medicare
Withholding73012,055(3,196)Federal Payroll Taxes
Payable7,541124,715(33,064)State Payroll Taxes
Payable3,51958,111(15,430)FICA Employer
Withholding1,6487,804(2,363)Medicare Employer
Withholding73012,055(3,196)Income Taxes
Receivable/Payable03,205,4402,806,100Current Portion LT
Note Payable0677,64043,840Interest payable0470,31198,118$
71,438Bonuses payable0504,000(45,000)Accum.
Depreciation38,750Net Cash Flow from Operating
Activities(8,933,816)(43,913,083)20,847,189Cash flow from
Investing ActivitiesLand(146,250)15,2100Buildings and Land
Improvements(779,882)81,107(135,000)Machinery, Equipment,
Office Furniture(541,522)(2,739,067)0Other Noncurrent
Assets(67,301)67,3010Net Cash Flow from Investing
Activities(1,534,955)(2,575,449)(135,000)Cash flow from
Financing ActivitiesLong-Term Note
Payable012,762,360(721,480)Common Stock10,131,25000Paid-
in Capital9,278,75000Dividends
Paid3,214,851(6,000,000)(15,250,000)Line of
Credit12,500,00039,731,360(4,749,623)Net Cash Flow from
Financing
Activities35,124,85146,493,720(20,721,103)(293,840)Net
increase / Decrease in cash24,656,0805,188(8,914)Cash Balance
- Beginning0250,129255,317Cash Balance -

8. Ending24,656,080255,317246,40324,405,95100Check
Figures:2015 Net Cash from Operating Activities$
20,775,751$ 71,4382014 Net Cash from Investing Activities$
(2,575,449)$ -2015 Net Increase (Decrease) in Cash$
213,488$ 24,442,592Chester, Inc.Cash Flow StatementYear
ended December 31, 20142015Cash Flow from Operating
Activities Net Income20,485,0848,311,390Adjustments to
reconcile net income to net cash flow from operating
activities:Depreciation Expense581,102617,155Changes in
current Assets(80,841,154)15,779,545Changes in current
Liabilities15,861,885(3,860,901) Net cash used / Provided by
operating
activities(43,913,083)20,847,18971,438(8,749,233)Cash flow
from Investing ActivitiesSale of land163,618Purchase of
equipment(2,739,067)Purchase of Building(135,000) Net cash
used by Investing activities(2,575,449)(135,000)Cash flow from
Financing ActivitiesPayment of
dividends(6,000,000)(15,250,000)Long-Term Note
Payable12,762,360(721,480)Line of
Credit39,731,360(4,749,623) Net cash used / Provided by
Financing
activities46,493,720(20,721,103)(293,840)8,572,360Net
Increase / Decrease in cash5,188(8,914)Cash Balance -
Beginning250,129255,317Cash Balance -
Ending255,317246,403
BS AnalysisComplete a Horizontal and Vertical Analysis of the
Balance Sheet in this worksheet.Chester, Inc.Vertical
Analysis201320142015AssetsAmountPercentageAmountPercent
ageAmountPercentageCurrent AssetsCash on
Hand24830.00%24590.00%25110.00%Checking Account -
Operating2476460.49%2528580.19%2438920.21%MMKT
Accounts8062881.61%9831610.74%12055631.03%Investments
- Trading693571213.84%68501985.15%69789235.98%Accounts
Receivable2051362840.94%5647209142.48%4904252842.03%A
llowance for Doubtful Accounts-1578525-3.15%-2387691-
1.80%-2942552-2.52%Other

9. Receivables00.00%14000001.05%12000001.03%Inventory2353
150746.96%7535147156.68%6599078056.56%Reserve for
Inventory Obsolescence-3765000-7.51%-12136103-9.13%-
10558525-9.05%Prepaid
Insurance18291433.65%28304742.13%26677222.29%Prepaid
Rent2500000.50%00.00%00.00%Office
Supplies92590.02%95650.01%91820.01% Total Current
Assets4878214197.35%12962848397.50%11384002497.56%Pro
perty, Plant &
EquipmentLand1462500.29%1310400.10%1310400.11%Buildin
gs and Land
Improvements7798821.56%6987750.53%8337750.71%Machiner
y, Equipment, Office
Furniture5415221.08%32805892.47%32805892.81%Accum.
Depreciation-205000-0.41%-786102-0.59%-1403257-
1.20%Other Noncurrent Assets673010.13%00.00%00.00%
Total Property, Plant &
Equipment13299552.65%33243022.50%28421472.44%Total
Assets50112096100.00%132952785100.00%116682171100.00%
Liabilities and Stockholder's EquityCurrent LiabilitiesAccounts
Payable893459117.83%1948886614.66%1285064811.01%Wage
s Payable368380.07%2645130.20%1983840.17%FICA
Employee
Withholding16480.00%94520.01%70890.01%Medicare
Withholding7300.00%127850.01%95890.01%Federal Payroll
Taxes Payable75410.02%1322560.10%991920.09%State Payroll
Taxes Payable35190.01%616300.05%462000.04%FICA
Employer
Withholding16480.00%94520.01%70890.01%Medicare
Employer Withholding7300.00%127850.01%95890.01%Income
Taxes
Receivable/Payable00.00%32054402.41%60115405.15%Line of
Credit1250000024.94%5223136039.29%4748173740.69%Curre
nt Portion LT Note
Payable00.00%6776400.51%7214800.62%Interest
payable00.00%4703110.35%5684290.49%Bonuses

10. payable00.00%5040000.38%4590000.39%Dividend
payable600000011.97%1525000011.47%1500000012.86%
Total Current
Liabilities2748724554.85%9233049069.45%8346996671.54%Lo
ng term LiabilitiesLong-Term Note
Payable00.00%127623609.60%1204088010.32% Total
Liabilities2748724554.85%10509285079.05%9551084681.86%S
tockholder's EquityCommon
Stock1013125020.22%101312507.62%101312508.68%Paid-in
Capital927875018.52%92787506.98%92787507.95%Retained
Earnings (Beginning
Balance)32148516.42%84499356.36%17613251.51% Total
Stockholder's
Equity2262485145.15%2785993520.95%2117132518.14%Total
Liabilities and Stockholder's
Equity50112096100.00%132952785100.00%116682171100.00%
Chester, Inc.Horizontal Analysis20132014Increase /
Decrease20142015Increase / DecreaseAssetsAmountAmount in
AmountPercentageAmountAmount in AmountPercentageCurrent
AssetsCash on Hand24832459-24-
0.97%24592511522.11%Checking Account -
Operating24764625285852122.10%252858243892-8966-
3.55%MMKT
Accounts80628898316117687321.94%983161120556322240222
.62%Investments - Trading69357126850198-85514-
1.23%685019869789231287251.88%Accounts
Receivable205136285647209135958463175.29%564720914904
2528-7429563-13.16%Allowance for Doubtful Accounts-
1578525-2387691-80916651.26%-2387691-2942552-
55486123.24%Other
Receivables01400000140000014000001200000-200000-
14.29%Inventory235315077535147151819964220.22%7535147
165990780-9360691-12.42%Reserve for Inventory
Obsolescence-3765000-12136103-8371103222.34%-12136103-
105585251577578-13.00%Prepaid
Insurance18291432830474100133154.74%28304742667722-

11. 162752-5.75%Prepaid Rent2500000-250000-100.00%000Office
Supplies925995653063.30%95659182-383-4.00% Total
Current
Assets4878214112962848380846342165.73%129628483113840
024-15788459-12.18%Property, Plant &
EquipmentLand146250131040-15210-
10.40%13104013104000.00%Buildings and Land
Improvements779882698775-81107-
10.40%69877583377513500019.32%Machinery, Equipment,
Office
Furniture54152232805892739067505.81%3280589328058900.0
0%Accum. Depreciation-205000-786102-581102283.46%-
786102-1403257-61715578.51%Other Noncurrent
Assets673010-67301-100.00%000 Total Property, Plant &
Equipment132995533243021994347149.96%33243022842147-
482155-14.50%Total
Assets5011209613295278582840689165.31%132952785116682
171-16270614-12.24%Liabilities and Stockholder's
EquityAccounts
Payable89345911948886610554275118.13%1948886612850648
-6638218-34.06%Wages
Payable36838264513227675618.04%264513198384-66129-
25.00%FICA Employee
Withholding164894527804473.54%94527089-2363-
25.00%Medicare
Withholding73012785120551651.37%127859589-3196-
25.00%Federal Payroll Taxes
Payable75411322561247151653.83%13225699192-33064-
25.00%State Payroll Taxes
Payable351961630581111651.35%6163046200-15430-
25.04%FICA Employer
Withholding164894527804473.54%94527089-2363-
25.00%Medicare Employer
Withholding73012785120551651.37%127859589-3196-
25.00%Income Taxes
Receivable/Payable0320544032054403205440601154028061008

12. 7.54%Line of
Credit125000005223136039731360317.85%5223136047481737-
4749623-9.09%Current Portion LT Note
Payable0677640677640677640721480438406.47%Interest
payable04703114703114703115684299811820.86%Bonuses
payable0504000504000504000459000-45000-8.93%Dividend
payable6000000152500009250000154.17%1525000015000000-
250000-1.64% Total Current
Liabilities274872459233049064843245235.90%9233049083469
966-8860524-9.60%Long term LiabilitiesLong-Term Note
Payable012762360127623601276236012040880-721480-5.65%
Total
Liabilities2748724510509285077605605282.33%105092850955
10846-9582004-9.12%Stockholder's EquityCommon
Stock101312501013125000.00%101312501013125000.00%Paid
-in
Capital9278750927875000.00%9278750927875000.00%Retaine
d Earnings (Beginning
Balance)321485184499355235084162.84%84499351761325-
6688610-79.16% Total Stockholder's
Equity2262485127859935523508423.14%2785993521171325-
6688610-24.01%Total Liabilities and Stockholder's
Equity5011209613295278582840689165.31%132952785116682
171-16270614-12.24%
IS Analysis Complete a Horizontal and Vertical Analysis of the
Income Statement in this worksheet.Chester, Inc.Vertical
Analysis201320142015AmountPercentageAmountPercentageAm
ountPercentageSales
307,716,148101.86%271,839,067104.79%288,876,206108.70%S
ales
Returns5,621,9791.86%12,432,2474.79%23,110,0968.70%Net
Sales302,094,169100.00%259,406,820100.00%265,766,110100.
00%Cost of Goods Sold
176,961,43758.58%161,029,98162.08%179,103,24867.39%Gros
s
Profit125,132,73241.42%98,376,83937.92%86,662,86232.61%O

13. perating ExpenseAdministrative Wages
Expense21,094,1326.98%18,344,3997.07%19,706,5067.41%Adv
ertising
Expense1,121,4250.37%1,161,2760.45%1,058,3910.40%Auto
Expenses261,2180.09%235,7630.09%214,0010.08%Bad Debt
Expense2,028,0320.67%5,875,4032.26%13,900,8005.23%Bonus
Expense00.00%504,0000.19%459,0000.17%Depreciation
Expense166,2500.06%581,1020.22%617,1550.23%Freight5,378,
6891.78%4,749,0951.83%4,325,0681.63%Insurance
Expense1,067,4280.35%1,045,0850.40%951,7740.36%Legal
and Professional
Expense4,506,4171.49%11,037,0394.25%8,987,0693.38%Maint
enance
Expense76,4200.03%96,0200.04%87,6410.03%Miscellaneous
Office Expense21,2790.01%27,8030.01%25,3900.01%Payroll
Tax
Expense1,938,7360.64%1,767,1490.68%1,609,3420.61%Pension
/Profit-Sharing Plan
Ex3,750,0001.24%3,696,0001.42%3,366,0001.27%Phone95,467
0.03%57,9110.02%53,6510.02%Postal160,0420.05%87,1400.03
%79,3600.03%Property Tax
Expense100,6190.03%110,2520.04%101,3190.04%Rent or
Lease
Expense3,254,3571.08%1,370,2730.53%2,230,6150.84%Researc
h and
Development38,639,55412.79%532,4250.21%3,080,3131.16%Ut
ilities169,5540.06%170,7650.07%155,6000.06%Warehouse
Salaries5,791,7301.92%5,848,1202.25%5,270,6891.98%Warrant
y Expense1,375,3520.46%1,297,1040.50%1,422,3810.54%
Total Operating
Expenses90,996,70130.12%58,594,12422.59%67,702,06525.47
%Income Before Other Gains and
Losses34,136,03111.30%39,782,71515.34%18,960,7977.13%
Other Gains and LossesInterest
Expense1,093,7500.36%3,373,0561.30%2,942,1471.11%Income
from Investments(665,079)-0.22%(658,672)-0.25%(549,387)-

14. 0.21%Unrealized (Gains) and Losses -
Investments64,2880.02%85,5140.03%(128,725)-0.05%Interest
Income(255,379)-0.08%(147,707)-0.06%(142,168)-0.05%
Total Other Gains and
Losses237,5800.08%2,652,1911.02%2,121,8670.80% Income
before Income
tax33,898,45111.22%37,130,52414.31%16,838,9306.34%Incom
e tax expensesIncome Tax Expense -
Federal2,956,2500.98%14,142,2405.45%7,269,5402.74%Income
Tax Expense -
State536,2500.18%2,503,2000.96%1,258,0000.47% Net
Income30,405,95110.07%20,485,0847.90%8,311,3903.13%Loss
on Legal Settlement23,965,0007.93%00.00%00.00% Income
transferred to Retained
earnings6,440,9512.13%20,485,0847.90%8,311,3903.13%Chest
er, Inc.Horizontal Analysis20132014Increase /
Decrease20142015Increase / DecreaseAmountAmount in
AmountPercentageAmountAmount in AmountPercentageSales
307,716,148271,839,067(35,877,081)-
11.66%271,839,067288,876,20617,037,1396.27%Sales
Returns5,621,97912,432,2476,810,268121.14%12,432,24723,11
0,09610,677,84985.89%Net
Sales302,094,169259,406,820(42,687,349)-
14.13%259,406,820265,766,1106,359,2902.45%Cost of Goods
Sold 176,961,437161,029,981(15,931,456)-
9.00%161,029,981179,103,24818,073,26711.22%Gross
Profit125,132,73298,376,839(26,755,893)-
21.38%98,376,83986,662,862(11,713,977)-11.91%Operating
ExpenseAdministrative Wages
Expense21,094,13218,344,399(2,749,733)-
13.04%18,344,39919,706,5061,362,1077.43%Advertising
Expense1,121,4251,161,27639,8513.55%1,161,2761,058,391(10
2,885)-8.86%Auto Expenses261,218235,763(25,455)-
9.74%235,763214,001(21,762)-9.23%Bad Debt
Expense2,028,0325,875,4033,847,371189.71%5,875,40313,900,
8008,025,397136.59%Bonus

15. Expense0504,000504,000504,000459,000(45,000)-
8.93%Depreciation
Expense166,250581,102414,852249.54%581,102617,15536,053
6.20%Freight5,378,6894,749,095(629,594)-
11.71%4,749,0954,325,068(424,027)-8.93%Insurance
Expense1,067,4281,045,085(22,343)-
2.09%1,045,085951,774(93,311)-8.93%Legal and Professional
Expense4,506,41711,037,0396,530,622144.92%11,037,0398,987
,069(2,049,970)-18.57%Maintenance
Expense76,42096,02019,60025.65%96,02087,641(8,379)-
8.73%Miscellaneous Office
Expense21,27927,8036,52430.66%27,80325,390(2,413)-
8.68%Payroll Tax Expense1,938,7361,767,149(171,587)-
8.85%1,767,1491,609,342(157,807)-8.93%Pension/Profit-
Sharing Plan Ex3,750,0003,696,000(54,000)-
1.44%3,696,0003,366,000(330,000)-
8.93%Phone95,46757,911(37,556)-39.34%57,91153,651(4,260)-
7.36%Postal160,04287,140(72,902)-
45.55%87,14079,360(7,780)-8.93%Property Tax
Expense100,619110,2529,6339.57%110,252101,319(8,933)-
8.10%Rent or Lease Expense3,254,3571,370,273(1,884,084)-
57.89%1,370,2732,230,615860,34262.79%Research and
Development38,639,554532,425(38,107,129)-
98.62%532,4253,080,3132,547,888478.54%Utilities169,554170,
7651,2110.71%170,765155,600(15,165)-8.88%Warehouse
Salaries5,791,7305,848,12056,3900.97%5,848,1205,270,689(57
7,431)-9.87%Warranty Expense1,375,3521,297,104(78,248)-
5.69%1,297,1041,422,381125,2779.66% Total Operating
Expenses90,996,70158,594,124(32,402,577)-
35.61%58,594,12467,702,0659,107,94115.54%Income Before
Other Gains and
Losses34,136,03139,782,7155,646,68416.54%39,782,71518,960
,797(20,821,918)-52.34% Other Gains and LossesInterest
Expense1,093,7503,373,0562,279,306208.39%3,373,0562,942,1
47(430,909)-12.78%Income from
Investments(665,079)(658,672)6,407-

16. 0.96%(658,672)(549,387)109,285-16.59%Unrealized (Gains)
and Losses -
Investments64,28885,51421,22633.02%85,514(128,725)(214,23
9)-250.53%Interest Income(255,379)(147,707)107,672-
42.16%(147,707)(142,168)5,539-3.75% Total Other Gains and
Losses237,5802,652,1912,414,6111016.34%2,652,1912,121,867
(530,324)-20.00% Income before Income
tax33,898,45137,130,5243,232,0739.53%37,130,52416,838,930(
20,291,594)-54.65%Income tax expensesIncome Tax Expense -
Federal2,956,25014,142,24011,185,990378.38%14,142,2407,26
9,540(6,872,700)-48.60%Income Tax Expense -
State536,2502,503,2001,966,950366.80%2,503,2001,258,000(1,
245,200)-49.74% Net
Income30,405,95120,485,084(9,920,867)-
32.63%20,485,0848,311,390(12,173,694)-59.43%Loss on Legal
Settlement23,965,0000(23,965,000)-100.00%000 Income
transferred to Retained
earnings6,440,95120,485,08414,044,133218.04%20,485,0848,3
11,390(12,173,694)-59.43%
RatiosCalculate and Present at least three Liquidity, Solvency
and Profitability Ratios in this
Worksheet201320142015Liquidity RatiosCurrent Ratio =
Current Assets / Current Liabilities1.771.401.36Quick Ratio =
(Current Assets – Inventories) / Current
Liabilities0.980.690.67Times Interest Earned Ratio = Income
before Interest and Income tax / Interest
expense31.9912.016.72Solvency RatiosDebt to total assets
Ratio Total Liabilities / Total Assets0.550.790.82Debt to total
Equity Ratio Total Liabilities / Stockholder's
equity1.213.774.51Long Term Debt/Equity Ratio = Long Term
Debt / Shareholders Equity0.000.460.57Profitabilty
ratiosEarnings per share = (Net income - Preferred stock
dividend) / Average common shares
outstanding$34.75$23.41$9.50Profit Margin = Net Income /
Net sales10.07%7.90%3.13%Return on Assets = Net Income /
Total Assets60.68%15.41%7.12%

17. ACC 700 Milestone One Guidelines and Rubric
The first milestone is a rough draft of the first artifact for your
professional portfolio, financial statements and analysis. You
will complete a set of financials as described in the appendix
section of the prompt below for a fictitious company called
Chester Inc. You will then submit a report of your findings and
recommendations. This will be graded using the rubric at the
end of this document and is an opportunity for you to organize
your thoughts and receive feedback from your instructor for the
final submission. You should note that the submission
guidelines for this milestone are less demanding than those for
the final submission. Once you have submitted this milestone
and received feedback from your instructor, it is up to you to
incorporate this feedback and complete the artifact by meeting
the submission guidelines found in the Final Project Guidelines
and Rubric document.
Client One – Chester, Inc. (Financial Statements and Analysis)
Chester, Inc. is a large, publicly traded client at S.N.H.U., LLC.
Your task is to develop a comprehensive, professional report for
the board of directors. To do this, you will use Chester, Inc.’s
trial balance to compose comparative financial statements,
analyze data, and interpret results. These financial statements
must be in good form in accordance with Generally Accepted
Accounting Principles (GAAP). Next, you will assess the
performance of Chester, Inc. using the financial statements that
you created, along with industry performance data and the
financial statements of a competitor. In addition, Chester, Inc.
is considering expanding into the global market. They would
like you to highlight key areas of the financial statements you
have prepared and identify how they would be reported
differently if composed under International Financial Reporting
Standards (IFRS) rather than GAAP.

18. Background and Financial Information
Chester, Inc. is a large, publicly traded client operating in
athletic wear including clothing, shoes, and accessories. Direct
competitors include Columbia Sportswear Company (COLM –
NYSE) and Under Armour, Inc. (UA – NYSE). All of these
companies operate in the textile-apparel clothing industry.
Chester Inc. operates on a calendar year.
Reference the Milestone One Chester Inc. Trial Balance
spreadsheetfor the past three years’ financials (2013, 2014, and
2015).
Additional information:
· Land with the land improvements were sold at book value (no
gain or loss) in 2014. (Note: To evaluate the sale, use the
following accounts: land, building and land improvements, and
Other Noncurrent Assets)
· New equipment purchased with cash for $2,739,067 in 2014
· New storage building purchased with cash for $135,000 in
2015
· No investments have been sold or purchased in 2014 or 2015
There are currently 8,275,000 shares of common stock
outstanding. No additional common stock has been sold or
repurchased in any of the aforementioned years.
Artifact One: Financial Statements and Analysis
The first artifact that you will include in your portfolio is the
comprehensive, professional report that you create for the board
of directors of Chester, Inc.—a large publicly traded client at
S.N.H.U., LLC. The report should contain your findings with
the financial statements package as an appendix (Excel

19. attachment).
Incorporate the feedback that you receive from your instructor
during the development of this artifact.
Appendix: These sections should be completed first, before you
write your report. Use the proper format for each section in
accordance with Generally Accepted Accounting Principles
(GAAP) and note and explain differences under International
Financial Reporting Standards (IFRS) where appropriate:
· Income statement
· Balance sheet
· Statement of retained earnings
· Statement of cash flows (indirect method)
· Ratio analysis
· Liquidity – minimum of three key ratios with supporting
calculations with a minimum of three years of data
· Profitability – minimum of three key ratios with supporting
calculations with a minimum of three years of data
· Solvency – minimum of three key ratios with supporting
calculations with a minimum of three years of data
· Vertical and horizontal analysis
· Both vertical and horizontal for the income statement with a
minimum of three years of data
· Both vertical and horizontal for the balance sheet with a
minimum of three years of data
Report of Findings and Recommendations: The report is the key
section of this artifact and will be written after you complete
the analysis in the sections in the appendix above. The report
will demonstrate your understanding of financial statements,
what they contain, what they mean, and how they are used in
strategic decision making.
As you know, numbers are useless if we do not know what they
mean and how to use them. The financial statements, ratios, and

20. vertical/horizontal analysis should be analyzed and interpreted
in order to assess and explain the performance of the
organization. In your report, you must:
· Address all three key ratios in each ratio category. Include
what each ratio indicates and how the organization performed
against its key competitor and industry averages.
· Address all key findings in the vertical and horizontal analysis
of the income statement and balance sheet. As a general rule,
anything over 10% warrants addressing.
Guidelines for Submission: All financial calculations should be
complete. Your paper must be submitted as a four- to five-page
Microsoft Word document with double spacing, 12-point Times
New Roman font, one-inch margins, and two to three sources
cited in APA format. Round all answers up to the nearest dollar
value in any calculations.
Note that this milestone is a rough draft and the submission
guidelines are different for the final project. The final paper
will be 8–10 pages in length with at least five sources. Refer to
the guidelines for submission in the Final Project Guidelines
and Rubric document.
Critical Elements
Proficient (100%)
Not Proficient (0%)
Value
Income Statement
Completes the income statement using the proper format for
each section in accordance with Generally Accepted Accounting
Principles (GAAP) and notes and explains differences under
International Financial Reporting Standards (IFRS) where
appropriate
Does not complete the income statement using the proper format

21. for each section in accordance with Generally Accepted
Accounting Principles (GAAP); differences under International
Financial Reporting Standards (IFRS) are not noted or explained
5
Balance Sheet
Completes the balance sheet using the proper format for each
section in accordance with Generally Accepted Accounting
Principles (GAAP) and notes and explains differences under
International Financial Reporting Standards (IFRS) where
appropriate
Does not complete the balance sheet using the proper format for
each section in accordance with Generally Accepted Accounting
Principles (GAAP); differences under International Financial
Reporting Standards (IFRS) are not noted or explained
10
Statement of Retained Earnings
Completes the statement of retained earnings using the proper
format for each section in accordance with Generally Accepted
Accounting Principles (GAAP) and notes and explains
differences under International Financial Reporting Standards
(IFRS) where
appropriate
Does not complete the statement of retained earnings using the
proper format for each section in accordance with Generally
Accepted Accounting Principles (GAAP); differences under
International Financial Reporting Standards (IFRS) are not
noted or
explained
10
Statement of Cash Flows
Completes the statement of cash flows using the proper format
for each section in accordance with Generally Accepted
Accounting Principles (GAAP) and notes and explains
differences under International Financial Reporting Standards
(IFRS) where
appropriate

22. Does not complete the statement of cash flows using the proper
format for each section in accordance with Generally Accepted
Accounting Principles (GAAP); differences under International
Financial Reporting Standards (IFRS) are not noted or explained
10
Ratio Analysis
Performs a ratio analysis for liquidity, profitability, and
solvency with a minimum of three years of data using the proper
format for each section in accordance with Generally Accepted
Accounting Principles (GAAP) and notes and explains
differences under International Financial Reporting Standards
(IFRS) where
appropriate
Does not perform a ratio analysis for liquidity, profitability, and
solvency with a minimum of three years of data using the proper
format for each section in accordance with Generally Accepted
Accounting Principles (GAAP); differences under International
Financial Reporting Standards (IFRS) are not noted or explained
10
Vertical and Horizontal Analysis
Performs a vertical and horizontal analysis of the income
statement and balance sheet using the proper format for each
section in accordance with Generally Accepted Accounting
Principles (GAAP) and notes and explains differences under
International Financial Reporting Standards (IFRS) where
appropriate
Does not perform a vertical and horizontal analysis of the
income statement and balance sheet using the proper format for
each section in accordance with Generally Accepted Accounting
Principles (GAAP); differences under International Financial
Reporting Standards (IFRS) are not noted or explained
10
Key Ratios
Addresses all three key ratios in each ratio category; includes
what
each ratio indicates and how the organization performed against

23. its key competitor and industry averages
Does not address all three key ratios in each ratio category or
include what each ratio indicates and how the organization
performed against its key competitor and industry averages
20
Vertical and
Horizontal Analysis
Addresses all key findings in the vertical and horizontal
analysis of
the income statement and balance sheet
Does not address all key findings in the vertical and horizontal
analysis of the income statement and balance sheet
20
Articulation of Response
Submission has no major errors related to citations, grammar,
spelling, syntax, or organization
Submission has critical errors related to citations, grammar,
spelling, syntax, or organization that prevent understanding of
ideas
5
Earned Total
100%
Trial BalanceChester, Inc.Trial Balances for years ending
December 31, 2013, 2014 and 2015Account
Description2,01320142015Cash on
Hand$2,483$2,459$2,511Checking Account -
Operating247,646252,858243,892MMKT
Accounts806,288983,1611,205,563Investments -
Trading6,935,7126,850,1986,978,923Accounts
Receivable20,513,62856,472,09149,042,528Allowance for
Doubtful Accounts(1,578,525)(2,387,691)(2,942,552)Other
Receivables01,400,0001,200,000Inventory23,531,50775,351,47

24. 165,990,780Reserve for Inventory
Obsolescence(3,765,000)(12,136,103)(10,558,525)Prepaid
Insurance1,829,1432,830,4742,667,722Prepaid Rent250,000- 0-
0Office
Supplies9,2599,5659,182Land146,250131,040131,040Buildings
and Land Improvements779,882698,775833,775Machinery,
Equipment, Office Furniture541,5223,280,5893,280,589Accum.
Depreciation(205,000)(786,102)(1,403,257)Other Noncurrent
Assets67,301- 0- 0Accounts
Payable(8,934,591)(19,488,866)(12,850,648)Wages
Payable(36,838)(264,513)(198,384)FICA Employee
Withholding(1,648)(9,452)(7,089)Medicare
Withholding(730)(12,785)(9,589)Federal Payroll Taxes
Payable(7,541)(132,256)(99,192)State Payroll Taxes
Payable(3,519)(61,630)(46,200)FICA Employer
Withholding(1,648)(9,452)(7,089)Medicare Employer
Withholding(730)(12,785)(9,589)Income Taxes
Receivable/Payable0(3,205,440)(6,011,540)Line of
Credit(12,500,000)(52,231,360)(47,481,737)Current Portion LT
Note Payable0(677,640)(721,480)Interest
payable0(470,311)(568,429)Bonuses
payable0(504,000)(459,000)Dividend
payable(6,000,000)(15,250,000)(15,000,000)Long-Term Note
Payable(12,762,360)(12,040,880)Common
Stock(10,131,250)(10,131,250)(10,131,250)Paid-in
Capital(9,278,750)(9,278,750)(9,278,750)Retained Earnings
(Beginning Balance)(2,773,900)????????Dividends
6,000,00015,250,00015,000,000Sales
(307,716,148)(271,839,067)(288,876,206)Sales
Returns5,621,97912,432,24723,110,096Income from
Investments(665,079)(658,672)(549,387)Unrealized (Gains) and
Losses - Investments64,28885,514(128,725)Interest
Income(255,379)(147,707)(142,168)Cost of Goods Sold
176,961,437161,029,981179,103,248Administrative Wages
Expense21,094,13218,344,39919,706,506Advertising
Expense1,121,4251,161,2761,058,391Auto

25. Expenses261,218235,763214,001Bad Debt
Expense2,028,0325,875,40313,900,800Bonus
Expense0504,000459,000Depreciation
Expense166,250581,102617,155Freight5,378,6894,749,0954,32
5,068Insurance Expense1,067,4281,045,085951,774Legal and
Professional
Expense4,506,41711,037,0398,987,069Maintenance
Expense76,42096,02087,641Miscellaneous Office
Expense21,27927,80325,390Payroll Tax
Expense1,938,7361,767,1491,609,342Pension/Profit-Sharing
Plan
Ex3,750,0003,696,0003,366,000Phone95,46757,91153,651Posta
l160,04287,14079,360Property Tax
Expense100,619110,252101,319Rent or Lease
Expense3,254,3571,370,2732,230,615Research and
Development38,639,554532,4253,080,313Utilities169,554170,7
65155,600Warehouse
Salaries5,791,7305,848,1205,270,689Warranty
Expense1,375,3521,297,1041,422,381Interest
Expense1,093,7503,373,0562,942,147Income Tax Expense -
Federal2,956,25014,142,2407,269,540Income Tax Expense -
State536,2502,503,2001,258,000Loss on Legal
Settlement23,965,000- 0- 0
Income StatementUse this worksheet to prepare a Multi-step
Income Statement to include EPSCheck Figures:2015 Net
Income$ 8,311,3902014 Gross Profit$ 98,376,8392013 Total
Expenses$ 90,996,701
Statement of Retained EarningsUse this worksheet to complete a
Statement of Retained EarningsCheck Figures:2015
Shareholders' Equity$ 21,171,3252014 Shareholders' Equity$
27,859,9352013 Shareholders' Equity$ 22,624,851
Balance SheetUse this worksheet to complete a Classified
Balance SheetCheck Figures:2015 Total Current Assets$
113,840,0242014 Current Liabilities$ 92,330,4902103 Total
Assets$ 50,112,096
Statement of Cash FlowsUse this Worksheet to complete a

26. Statement of Cash FlowsCheck Figures:2015 Net Cash from
Operating Activities$ 20,775,7512014 Net Cash from
Investing Activities$ (2,575,449)2015 Net Increase (Decrease)
in Cash$ 213,488
BS AnalysisComplete a Horizontal and Vertical Analysis of the
Balance Sheet in this worksheet.
IS Analysis Complete a Horizontal and Vertical Analysis of the
Income Statement in this worksheet.
RatiosCalculate and Present at least three Liquidity, Solvency
and Profitability Ratios in this Worksheet