Posted: November 20th, 2014

investment decision; ACCT1203 – Introduction to Financial Accounting.

investment decision;

ACCT1203 – Introduction to Financial Accounting.
Case Assignment
Late submissions will be assessed a 10% penalty per day. Case submissions will not be accepted after 9:00 am ATL on Friday, November 28, 2014.
NOTE: I his assignment must be completed on a 2-student team basis (i.e. – with a partner). Assignments handed in with three or more members will not be accepted.
AN INVESTMENT DECISION
You recently won a sum of money and want to invest a portion of your winnings. You have decided to purchase shares and have narrowed your choice down to two companies:

Pluto SoftWare Corp and Goofy Zone Inc.
Pluto SoftWare Solutions Corp and Goofy Zone Inc.
Pluto SoftWare Solutions Corp (PSW) and Goofy Zonelnc (GZ) are Canadian companies that compete in the technology sector. Each company is located in Walt Disney World,

Ontario and has been listed on the Toronto Stock Exchange (TSX) since January 1, 2013. Each company has been in business for approximately five years, have 5 employees

and have a corporate and commercial client base.
The f i nanci al statements for each company has been audited for the f iscal years ending December 31, 2013 and 2014. Both companies received an unqualified auditors’

report for each year. Each company has issued an annual report for both the 2013 and 2014 fiscal periods. The annual reports include summarized financial data,

Management, Discussion and Analysis (M D& A), the Annual Information Form (AI F), management’s report on internal control, the auditor’s report, comparative financial

statements and notes, recent share price data, and a listing of directors and officers. In addition to its mandatory reporting requirements, GZ has issued a sustai

nabi I ity report for the two years ending December 31, 2014.
Financial Data To assist you with your decision, you have assemble various f i nanci al data Selected income statement data for the year ended December 31, 2014:
PSW GZ Net sales (all on credit) $ 419,000 $ 494,000 Cost of goods sold 210,000 256,000 Interest expense 14,000 Net income 46,000 74,000
Selected income statement data for the year ended December 31, 2013: PSW GZ Net sales (all on credit) $ 402,000 $ 483,000 Cost of goods sold 204,500 248,000 Interest

expense 8,000 Net income 48,600 74,000
*A sustai nabi I i ty report is a form of communication used by companies to enhance transparency and accountability. It provides a diverse group of stakeholders

(investors, employees, customers) and the general public with information  to better assess the long-term viability of an organization. This information is often

‘non-financial’ in nature and reports on an organization’s corporate responsibility activities or environmental, social and governance (ESG) performance.

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