Expert Answers


1. At the beginning of 2009, CanGo purchased the online gaming company. This purchase was for cash, paid for through the proceeds of the IPO and results in goodwill.

2. 90% of the online book sales comes from JIT, the other 10% through the inventory which CanGo possesses. 100% of the CD/DVD/MP3 come through CanGo inventory. The result is that 80% of ALL sales is JIT and 20% is inventory.

3. There is one warehouse for shipping of books and one plant for manufacturing.

4. There are three divisions: a CD/DVD/MP3 division, an online gaming division and a books division. All manufacturing takes place in the CD/DVD/MP3 division.

5. The IPO took place at the beginning of 2009.

6. The CD/DVDs were customized beginning in 2008. The MP3 players were built beginning in the start of 2009.

7. The online gaming company was purchased for $30,000,000 and both Elizabeth and Andrew initiated the process.

8. The company began in 2006, has a VC infusion in 2007 and 2008. It showed a profit in 2008 and 2009. Its only profitable division is the online book sales division.

9. It has some type of international operations, hence the need for a “translation gain or loss” in owner’s equity.
It has an extraordinary loss from fire and a sale of a segment of its business in 2009