Report on financial statements, Financial Accounting

Assignment Help:

At one time, Circle K was the second-largest convenience store chain in the United States. At its peak, Circle K operated 4,685 stores in 32 states. Circle K's rapid expansion was financed through long-term borrowing. Interest on this large debt, combined with increased price competition from
convenience stores operated by oil companies, squeezed the profits of Circle K. For the fiscal year ended April 30, 1990, Circle K reported a loss of $773 million. In May 1990, Circle K filed for
Chapter 11 bankruptcy protection. Subsequently, Circle K was taken over by Tosco, a large independent oil company.
1. In the fiscal year ended April 30, 1989, Circle K experienced significant financial difficulty. Reported profits were down 74.5% from the year before. In the president's letter to the shareholders, Circle K explained that 1989 was a "disappointing" year and that management was seeking an outside company to come in and buy out the Circle K shareholders.
How do you think all this bad news was reflected in the auditor's report accompanying the financial statements dated April 30, 1989?
2. Circle K reported a loss of $773 million for the year ended April 30, 1990. Just a week after the end of the fiscal year, the CEO was fired. One week after that, Circle K declared bankruptcy. The audit report was completed approximately two months later. How do you think the news of the bankruptcy was reflected in the auditor's report accompanying the financial statements dated April 30, 1990?


Related Discussions:- Report on financial statements

Utility of Management accounting, Enumerate the scope and utility of manage...

Enumerate the scope and utility of management accounting.

Net streams of payments, Swap - Financial contract in which 2 parties agree...

Swap - Financial contract in which 2 parties agree to exchange net streams of payments over a specified period. Payments are normally determined by applying different indices (for

Archer daniels midland company is considering, Archer Daniels Midland Compa...

Archer Daniels Midland Company is considering buying a new farm that it plans to operate for 10 years. The farm will require an initial investment of $12.00 million. This investm

Determine about the accounting information, Determine about the accounting ...

Determine about the accounting information Numerous user groups have an interest in accounting information relating to a business. Majority of these are outside the business ho

Order point formula, Order Point Formula The analysis discussed above t...

Order Point Formula The analysis discussed above tends to be somewhat cumbersome when probability distributions are most complex and dependent and multi-period cases are involv

How to determine the market economy, How to determine the market economy ...

How to determine the market economy Within a market economy there are strong competitive forces at work which ensure that failure to enhance owners' wealth won't be tolerated f

Calculate the profitability of company - investment decision, In no more th...

In no more than one typed page, provide a statement of your decision to invest or not invest in this company's stock based on your interpretation of the company's long-term prospec

Future rates of return, Assume your grandparents have just given you $20,00...

Assume your grandparents have just given you $20,000 on the condition that you invest the money in the stock market. As you contemplate making your investment choices, what account

Calculate the value of bonds, Calculate the value of each of the following ...

Calculate the value of each of the following bond Issuer Face Value Coupon Rate Maturity Bid Yield Bid Price

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd