FinancialAccounting 2th 财务会计Review Cases（套）复习案例.doc

Review Case 1: Mechanical Technology Incorporated Mechanical Technology was incorporated in 1961. Its principal business is the development and commercialization of micro fuel cells and the development and sales of precision instrumentation. Over the last five years, Mechanical Technology has strengthened its commitment to and involvement in the new energy sector. The Company has sold off non-core businesses and restructured its balance sheet in order to implement its core business strategy, which is to develop new energy technologies and further strengthen its operation. An income statement, balance sheet, statement of cash flows, statement of shareholders’ equity, and several notes appear at the end of this case. Required: The following questions all relate to these statements. Explain and justify all answers. a. Explain the change in the balance in the retained earnings account from September 30, 2000, to September 30, 2001. b. Why is the “loss on sale of fixed assets” added to net income in the cash flow statement in order to obtain cash flow from operations? Be specific. c. What is Mechanical Technology’s comprehensive income (loss) total for the year ended September 30, 2001? What is the single item accounting for the largest difference between net income and comprehensive income for the year? d. Accounts payable relate only to payments to suppliers of inventory. During 2001, by how much did the “cost of sales” (assume all related to inventory) differ from the cash payments made to the suppliers of the inventory? e. What was the bad debt expense relating to all accounts and notes receivable (both short- and long-term) in the 2001 income statement? Explain. f. Explain the changes (list all of the major transactions which account for change) in the balances of the “property, plant and equipment--gross” and “ accumulated depreciation” accounts. (Hint: consider all of the information in the cash flow statement as well as the footnote information). Provide