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4. When you create their Statement of Cash Flows, will you use the Direct or Indirect method? Why? What additional information will you need from your client to be able to create the Statement of Cash Flows? 5. What do you recommend they include in the notes to the statements? Write two of these disclosures. 6. Of the information and data provided, what is most concerning? Why? Discuss at least two items. 7. After reviewing the statements youve created, you realize that the company has not included an allowance for accounts receivable amounts that might not be paid. What data/information do you need them to supply to determine the appropriate amount? What accounts will you debit and credit? 8. Calculate these ratios: current ratio, debt ratio, gross profit rate, price-earnings ratio, ROA, ROE, and ROI. It is not necessary to describe the calculation, Ill see how you created it in your cell formula. 9. Based on the work you have completed, would you invest in this company? Provide at least three reasons why you would or would not.

You are the accountant at CPA, LLP. Your client, Coastal Corp, is a retailer of water sports equipment. They have provided their financial data and you are responsible for creating their 2018 fiscal year financial statements. Below is their end of year data, in millions, alphabetizecd. Account Accounts payable Accounts receivable Accumulated depreciation: office equipment Additional paid-in capital (common stock) Bonds payable (due November 30, 2021) Cash Common stock (1,800 shares, $10 par value) Cost of goods sold Deferred income taxes Depreciation expense: office equipment Insurance expense Land Merchandise inventory Notes payable (due September 30, 2018) Office equipment Office supplies Office supplies expense Balance $12,750 2,600 12,000 13,000 22,500 19,200 18,000 100,575 5,750 2,750 520 39,500 17,500 2,500 41,000 900 900 ?0e

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