Financial Reporting Problem
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Financial Reporting Problem, Part 1
AP Pharma Inc. (APPA) had a total amount of $3,693 in accounts payable at the end of its most recent annual reporting period, which ended 12/30/11. This amount was up from its previous annual reporting period which ended 12/30/10.

The amount in accounts payable for the annual reporting period of 2010 was $1,323. The amount that AP Pharma Inc. owes to its creditors was significantly increased by $2,370 between 2010 and 2011.

AP Pharma Inc. reported a drop in net revenue in 2011. The 2011 annual reporting period ending 12/31/11, reported a net revenue of $646. The annual reporting period ending 12/31/10, reported a net revenue of $1,301. Finally, the annual reporting period ending 12/31/09, reported a net revenue of $1,261.

AP Pharma was doing well from 2009 to 2010. It showed an increase of $40 but then dropped down $655 from 2010 to 2011, closing with $646.
The list starts with Cash And Cash Equivalents, followed by Short Term Investments, Net Receivables, Inventory, and finally Other Current Assets. A total for all of the current assets is then summarized.

Continuing with the list, Long Term Investments are listed. Followed by Property Plant and Equipment, Goodwill, Intangible Assets, Accumulated Amortization, Other Assets, and lastly, Deferred Long Term Asset Charges. The assets are then totaled which completes the “Current Assets” section of the balance sheet.

Next on the balance sheet, is “Liabilities” and then specified by “Current Liabilities”. First under this section is Accounts Payable, followed by Short/Current Long Term Debt, and then Other Current Liabilities. This list is totaled and labeled “Total Current Liabilities”.

After the current liabilities are totaled, the list continues with Long Term Debt, Other Liabilities, Deferred Long Term Liability Charges, Minority Interest, and Negative Goodwill. The total liabilities are then tallied.

The final section on the balance sheet is “Stockholders Equity”. First under this section is Misc. Stocks Options Warrants, then Redeemable Preferred Stock, followed by Preferred Stock, Common Stock, Retained Earnings, Treasury Stock, Capitol Surplus, and finally Other Stockholder Equity. The Stockholder Equity is then totaled, and then the Net Tangible Assets are listed with the Stockholder Equity total numbers.

According to the Kennon (2012) website, the first item listed on the balance sheet is current assets, followed by current liabilities, and finally the stockholders equity. AP Pharma Inc. followed the proper structure of listing all of the current assets. The balance sheet was easy to follow and it listed three ending periods, with the most recent first. The company classified the assets under current assets and current liabilities.

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