how does the annual audited information differ from the quarterly data 613825
Interim Reports
Falcon Amusements, Inc. chose September 30 as its year-end. Reported below are its quarterly income statements for fiscal 2000 and its annual income statement.
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|
|
|
Quarterly |
|
|
|
|
10/1/99 |
1/1/00 |
4/1/00 |
7/1/00 |
Annual at |
|
|
12/31/99 |
3/31/00 |
6/30/00 |
9/30/00 |
9/30/00 |
|
Net sales |
$577,441 |
$571,930 |
$698,432 |
$818,034 |
$2,665,837 |
|
Cost of goods |
118,563 |
126,471 |
134,587 |
174,259 |
553,880 |
|
Gross profit |
458,878 |
445,459 |
563,845 |
643,775 |
2,111,957 |
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Selling, general |
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|
|
|
|
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& administrative |
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|
|
|
|
|
expense |
303,755 |
377,096 |
393,309 |
428,588 |
1,502,748 |
|
Depreciation |
52,055 |
51,622 |
52,651 |
53,044 |
209,372 |
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Non-operating |
|
|
|
|
|
|
income |
(114,062) |
(17,251) |
(14,845) |
(3,315) |
(149,473) |
|
Interest expense |
28,413 |
11,515 |
11,717 |
9,234 |
60,879 |
|
|
270,161 |
422,982 |
442,832 |
487,551 |
1,623,526 |
|
Income before tax |
188,717 |
22,477 |
121,013 |
156,224 |
488,431 |
|
Provision for |
|
|
|
|
|
|
income tax |
51,614 |
6,412 |
36,499 |
44,521 |
139,046 |
|
Net income |
$137,103 |
$ 16,065 |
$ 84,514 |
$111,703 |
$ 349,385 |
Required
a. Discuss briefly why Falcon is reporting quarterly information. Is it audited?
b. How does the annual audited information differ from the quarterly data?
c. Are there any obvious seasonal trends? Why might the cost of goods sold rise in the fourth quarter (aside from sales being higher)? Hint:Year-end adjustments. How might an investor be concerned about such trends and fluctuations?