ACC 207Pacific Sunwear

CASE STUDY CP1-1, p.43Professor: Rose Martin

Group members:Kartik Patel

Danielle FuentesSteven TuazonErick Valencia

1. What types of products does it sell?Types of products are as follows:

Board-sport inspired casual apparelFootwearHip-hop inspired casual apparelAccessories catering to teens and

young adults

2. Did the C.E.O and executive chairman of the board believe that the company had a good year? What do they cite as indicators of their company’s recent performance? Yes, the C.E.O and executive chairman

of the board believe that the company had a good year.

They cite that sales grew by $188 million to $ 1.23 billion, an increase of 18 percent.

And, in 2004 they ended with 990 stores vs., 2005 they opened 120 new stores in 2005, which brought the grand total to 1110.

3. On what date does PacSun’s most recent reporting year end?

January 29th, 2005

4. For how many years does it present complete A. Balance sheets

January 31st, 2004 (1) and January 29th , 2005 (2)

B. Income statementsFebruary 1st, 2003,January 31st, 2004 and January 29th 2005 (3)

C. Cash Flow statementsFebruary 1st 2003, January 31st, 2004 and January 29th, 2005 (3)

5. Are its financial statements audited by independent CPAs? How do you know?

Yes, the financial statements are audited by independent CPAs.

We know that because, clarifications contained in the February 7th, 2005 letter from the office of the chief accountant of the securities and exchange commissions to the center for public company audit firms to the America institute of CPAs.

6. Did its total assets increase or decrease over the last year?

Total assets increased from $644,487,000 to $677,778,000.

7. How much inventory (in dollars) did Pac Sun have as of January 29, 2005 (accountants would call this the ending balance)?

$ 175,081,000

8. Write out its basic accounting (balance sheet) equation and provide the values in dollars reported by the company as of January 29, 2005.

Basic accounting equation is:

ASSETS = LIABILITIES + STOCKHOLDERS EQUITY

$677,778,000 = $219,744,000 +

$458,034,000