Various business transactions for a merchandising company

By analyzing various business transactions for a merchandising company called Yellow Leaf Fashion Inc. using the attached “Yellow Leaf Scenario.”, You will prepare financial statements, including a balance sheet, income statement, and a statement of cash flows in accordance with GAAP. You will also assess the performance and financial position of the company.

Requirements:

You must use the rubric to direct the creation of your submission because it provides detailed criteria that will be used to evaluate your work. Each requirement below may be evaluated by more than one rubric aspect. The rubric aspect titles may contain hyperlinks to relevant portions of the course.

Use the attached “Yellow Leaf Scenario” and “Yellow Leaf Workbook” to complete this task for 2014 data in accordance with GAAP.

A. Prepare the adjusted trial balance in the attached “Yellow Leaf Workbook,” including the workpapers and the general journal adjusting entries.

B. Prepare the multistep income statement for Yellow Leaf Fashion Inc. in the attached “Yellow Leaf Workbook.”

  1. Prepare the vertical analysis of the income statement with revenue as a base in the attached “Yellow Leaf Workbook.”

C. Prepare the schedule for income taxes in the attached “Yellow Leaf Workbook.”

D. Prepare the statement of retained earnings for Yellow Leaf Fashion Inc. in the attached “Yellow Leaf Workbook.”

E. Prepare the classified balance sheet for Yellow Leaf Fashion Inc. in the attached “Yellow Leaf Workbook.”

  1. Prepare the vertical analysis of the balance sheet with total assets as a base in the attached “Yellow Leaf Workbook.”

F. Prepare the statement of cash flows for Yellow Leaf Fashion Inc. in the attached “Yellow Leaf Workbook.”

G. Complete the following calculations in the “Ratios” tab of the attached “Yellow Leaf Workbook”:

  1. Calculate two financial ratios to assess liquidity.
  2. Calculate two financial ratios to assess activity.
  3. Calculate two financial ratios to assess profitability.
  4. Calculate two financial ratios to assess coverage.

Note: You are only responsible for calculating two ratios within each category, even if a category contains more than two options.

H. Prepare a report (suggested length of 6–8 pages) that analyzes the financial position and performance of Yellow Leaf Fashion Inc. by doing the following:

  1. Explain what each of the two liquidity ratios calculated in part G1 indicates about the company’s financial position and performance.
  2. Explain what each of the two activity ratios calculated in part G2 indicates about the company’s financial position and performance.
  3. Explain what each of the two profitability ratios calculated in part G3 indicates about the company’s financial position and performance.
  4. Explain what each of the two coverage ratios calculated in part G4 indicates about the company’s financial position and performance.
  5. Evaluate the overall financial position and performance of the company by analyzing the combined effect of the calculated ratios from parts G1 through G4.
  6. Describe two examples of financial areas specific to Yellow Leaf Fashion Inc. (e.g., particular accounts, individual accounting cycles, sections of the financial statement) that could be improved by the president and store managers to benefit the overall future financial position and performance of the company.
    a. Justify how improvement of each of the two example financial areas from part H6 will benefit the overall future financial position and performance of the company.

I. Acknowledge sources, using APA-formatted in-text citations and references, for content that is quoted, paraphrased, or summarized