Condensed balance sheet and income statement data for Kersenbrock Corporation appear below.
KERSENBROCK CORPORATION
Balance Sheets
December 31
2009 2008 2007
Cash $ 25,000 $ 20,000 $ 18,000
Receivables (net) 50,000 45,000 48,000
Other current assets 90,000 95,000 64,000
Investments 75,000 70,000 45,000
Plant and equipment (net) 400,000 370,000 358,000
$640,000 $600,000 $533,000
Current liabilities $ 75,000 $ 80,000 $ 70,000
Long-term debt 80,000 85,000 50,000
Common stock, $10 par 340,000 310,000 300,000
Retained earnings 145,000 125,000 113,000
$640,000 $600,000 $533,000
KERSENBROCK CORPORATION
Income Statement
For the Year Ended December 31
2009 2008
Sales $740,000 $700,000
Less: Sales returns and allowances 40,000 50,000
Net sales 700,000 650,000
Cost of goods sold 420,000 400,000
Gross profit 280,000 250,000
Operating expenses (including income taxes) 235,000 220,000
Net income $ 45,000 $ 30,000
Additional information:
a) The market price of Kersenbrock's common stock was $4.00, $5.00, and $8.00 for 2007, 2008, and 2009, respectively.
b) All dividends were paid in cash.
Instructions:
Compute the following ratios for 2008 and 2009. (Weighted-average-common shares in 2009 were 32,000 and in 2008 were 31,000.)
(1) Profit margin
(2) Asset turnover
(3) Earnings per share
(4) Price-earnings
(5) Payout
(6) Debt to total assets
Click here for the solution: Condensed balance sheet and income statement data for Kersenbrock Corporation appear below
Showing posts with label Balance Sheet. Show all posts
Showing posts with label Balance Sheet. Show all posts
Thursday, January 14, 2016
Thursday, November 26, 2015
The comparative balance sheet of House Construction Co. for June 30, 2010 and 2009, is as follows
The comparative balance sheet of House Construction Co. for June 30, 2010 and 2009, is as follows:
Assets June 30, 2010 June 30, 2009
Cash----- 41600 28200
A/R (Net) ----121900 110700
Inventories---------- 175600 170500
Investments---------- 0 60000
Land -------174000 0
Equipment---------- 258000 210600
Accumulated Depreciation--------- -58300 -49600
Total------------ 712800 530400
Liabilities & Stockholders Equity
A/P (Merchandise Creditors) ----------121000 114200
Accrued Expense Payable (Operating Expense)------------ 18000 15800
Dividends Payable--------------- 15000 12000
Common Stock, $1 Par--------------- 67200 60000
Paid-In Capital In Excess Of Par - Common Stock------- 264000 120000
Retained Earnings ------------227600 208400
Total---------- 712800 530400
The following additional information was taken from the records of House Construction Co.:
A. Equipment and land were acquired for cash.
B. There were no disposals of equipment during the year.
C. The investments were sold for $54,000 cash.
D. The common stock was issued for cash.
E. There was a $79,200 credit to Retained Earnings for net income.
F. There was a $60,000 debit to Retained Earnings for cash dividends declared.
A. Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities.
Check: Net Cash Flow from Operating Activities $86,600
Click here for the solution: The comparative balance sheet of House Construction Co. for June 30, 2010 and 2009, is as follows
Assets June 30, 2010 June 30, 2009
Cash----- 41600 28200
A/R (Net) ----121900 110700
Inventories---------- 175600 170500
Investments---------- 0 60000
Land -------174000 0
Equipment---------- 258000 210600
Accumulated Depreciation--------- -58300 -49600
Total------------ 712800 530400
Liabilities & Stockholders Equity
A/P (Merchandise Creditors) ----------121000 114200
Accrued Expense Payable (Operating Expense)------------ 18000 15800
Dividends Payable--------------- 15000 12000
Common Stock, $1 Par--------------- 67200 60000
Paid-In Capital In Excess Of Par - Common Stock------- 264000 120000
Retained Earnings ------------227600 208400
Total---------- 712800 530400
The following additional information was taken from the records of House Construction Co.:
A. Equipment and land were acquired for cash.
B. There were no disposals of equipment during the year.
C. The investments were sold for $54,000 cash.
D. The common stock was issued for cash.
E. There was a $79,200 credit to Retained Earnings for net income.
F. There was a $60,000 debit to Retained Earnings for cash dividends declared.
A. Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities.
B. Prepare ratios as required
Check: Net Cash Flow from Operating Activities $86,600
Click here for the solution: The comparative balance sheet of House Construction Co. for June 30, 2010 and 2009, is as follows
Wednesday, November 11, 2015
The following data were taken from the balance sheet accounts of Masefield Corporation on December 31, 2007
E15-15 (Dividend Entries) The following data were taken from the balance sheet accounts of Masefield Corporation on December 31, 2007.
Current Assets $540,000
Investments $624,000
Common Stock (par value $10) $500,000
Paid in Capital in excess of par $150,000
Retained Earnings $840,000
Instructions
Prepare the required journal entries for the following unrelated items.
a.) A 5% stock dividend is declared and distributed at a time when the market value of the shares is $39 per share.
b.) The par value of the capital stock is reduced to $2 with a 5-for-1 stock split.
c.) A dividend is declared January 5, 2008, and paid January 25, 2008 in bonds held as an investment. The bonds have a book value of $100,000 and a fair market value of $135,000.
Click here for the solution: The following data were taken from the balance sheet accounts of Masefield Corporation on December 31, 2007
Current Assets $540,000
Investments $624,000
Common Stock (par value $10) $500,000
Paid in Capital in excess of par $150,000
Retained Earnings $840,000
Instructions
Prepare the required journal entries for the following unrelated items.
a.) A 5% stock dividend is declared and distributed at a time when the market value of the shares is $39 per share.
b.) The par value of the capital stock is reduced to $2 with a 5-for-1 stock split.
c.) A dividend is declared January 5, 2008, and paid January 25, 2008 in bonds held as an investment. The bonds have a book value of $100,000 and a fair market value of $135,000.
Click here for the solution: The following data were taken from the balance sheet accounts of Masefield Corporation on December 31, 2007
Monday, October 26, 2015
Based on the following income statement and balance sheet for Rashid Corporation, determine the cash flows from operating activities using the indirect method
Based on the following income statement and balance sheet for Rashid Corporation, determine the cash flows from operating activities using the indirect method.
Rashid Corporation
Income Statement
For Year ended Dec. 31, 2009
Sales 504,000
Cost of goods sold 327,600
Depreciation expense 42000
other operating expenses 125500 (495100)
other gains (losses):
Gain on sale of equipment 7200
Income before taxes 16100
Income tax expense (4800)
Net income 11,300
Rashid Corporation
Balance Sheets
For Year ended Dec. 31, 2009
2009 2008
Assets
Cash 64650 55800
Accounts Receivable 21000 29000
Inventory 58000 52100
Equipment 240000 222000
Accumulated depreciation (106000) (96000)
Total assets 277650 262900
Liabilities:
Accounts Payable 28400 23700
Income taxes payable 1050 1200
Total Liabilities 29450 24900
Equity
Common Stock 106000 106000
Capital in excess of par value 18000 18000
Retained earnings 124200 114000
Total equity 248200 238000
Click here for the solution: Based on the following income statement and balance sheet for Rashid Corporation, determine the cash flows from operating activities using the indirect method
Rashid Corporation
Income Statement
For Year ended Dec. 31, 2009
Sales 504,000
Cost of goods sold 327,600
Depreciation expense 42000
other operating expenses 125500 (495100)
other gains (losses):
Gain on sale of equipment 7200
Income before taxes 16100
Income tax expense (4800)
Net income 11,300
Rashid Corporation
Balance Sheets
For Year ended Dec. 31, 2009
2009 2008
Assets
Cash 64650 55800
Accounts Receivable 21000 29000
Inventory 58000 52100
Equipment 240000 222000
Accumulated depreciation (106000) (96000)
Total assets 277650 262900
Liabilities:
Accounts Payable 28400 23700
Income taxes payable 1050 1200
Total Liabilities 29450 24900
Equity
Common Stock 106000 106000
Capital in excess of par value 18000 18000
Retained earnings 124200 114000
Total equity 248200 238000
Click here for the solution: Based on the following income statement and balance sheet for Rashid Corporation, determine the cash flows from operating activities using the indirect method
Wednesday, October 14, 2015
Indicate (by letter) the way each of the items listed below should be reported in a balance sheet at December 31, 2011
Indicate (by letter) the way each of the items listed below should be reported in a balance sheet at December 31, 2011.
1. Commercial paper.
2. Noncommitted line of credit.
3. Customer advances.
4. Estimated warranty cost.
5. Accounts payable.
6. Long-term bonds that will be callable by the creditor in ther upcoming year unless an existing violation is not corrected (there is a reasonable possibility the violation will be corrected within the grace period).
7. Note due March 3, 2012.
8. Interest accrued on note, Dec. 31, 2011.
9. Short-term bank loan to be paid with proceeds of sale of common stock.
10. A determinable gain that is contingent on a future event that appears extremely likely to occur in three months.
11. Unasserted assessment of back taxes that probably will be asserted, in which case there would probably be a loss in six months.
12. Unasserted assessment of back taxes with a reasonable possibility of being asserted, in which case there would probably be a loss in 13 months.
13. A determinable loss from a past event that is contingent on a future event that appears extremely likely to occur in three months.
14. Bond sinking fund.
15. Long-term bonds callable by the creditor in the upcoming year that are not expected to be called.
Click here for the solution: Indicate (by letter) the way each of the items listed below should be reported in a balance sheet at December 31, 2011
1. Commercial paper.
2. Noncommitted line of credit.
3. Customer advances.
4. Estimated warranty cost.
5. Accounts payable.
6. Long-term bonds that will be callable by the creditor in ther upcoming year unless an existing violation is not corrected (there is a reasonable possibility the violation will be corrected within the grace period).
7. Note due March 3, 2012.
8. Interest accrued on note, Dec. 31, 2011.
9. Short-term bank loan to be paid with proceeds of sale of common stock.
10. A determinable gain that is contingent on a future event that appears extremely likely to occur in three months.
11. Unasserted assessment of back taxes that probably will be asserted, in which case there would probably be a loss in six months.
12. Unasserted assessment of back taxes with a reasonable possibility of being asserted, in which case there would probably be a loss in 13 months.
13. A determinable loss from a past event that is contingent on a future event that appears extremely likely to occur in three months.
14. Bond sinking fund.
15. Long-term bonds callable by the creditor in the upcoming year that are not expected to be called.
Click here for the solution: Indicate (by letter) the way each of the items listed below should be reported in a balance sheet at December 31, 2011
Monday, October 5, 2015
Selected accounts included in the property, plant, and equipment section of Lobo Corporation’s balance sheet at December 31, 2009
P10-2 (Classification of Acquisition Costs) Selected accounts included in the property, plant, and equipment section of Lobo Corporation’s balance sheet at December 31, 2009, had the following balances.
Land $ 300,000
Land improvements 140,000
Buildings 1,100,000
Machinery and equipment 960,000
During 2010 the following transactions occurred.
1. A tract of land was acquired for $150,000 as a potential future building site.
2. A plant facility consisting of land and building was acquired from Mendota Company in exchange for 20,000 shares of Lobo’s common stock. On the acquisition date, Lobo’s stock had a closing market price of $37 per share on a national stock exchange. The plant facility was carried on Mendota’s books at $110,000 for land and $320,000 for the building at the exchange date. Current appraised values for the land and building, respectively, are $230,000 and $690,000.
3. Items of machinery and equipment were purchased at a total cost of $400,000. Additional costs were incurred as follows.
Freight and unloading $13,000
Sales taxes 20,000
Installation 26,000
4. Expenditures totaling $95,000 were made for new parking lots, streets, and sidewalks at the corporation’s various plant locations. These expenditures had an estimated useful life of 15 years.
5. A machine costing $80,000 on January 1, 2002, was scrapped on June 30, 2010. Double-declining balance depreciation has been recorded on the basis of a 10-year life.
6. A machine was sold for $20,000 on July 1, 2010. Original cost of the machine was $44,000 on January 1, 2007, and it was depreciated on the straight-line basis over an estimated useful life of 7 years and a salvage value of $2,000.
Instructions
(a) Prepare a detailed analysis of the changes in each of the following balance sheet accounts for 2010.
Land
Land improvements
Buildings
Machinery and equipment
(Hint: Disregard the related accumulated depreciation accounts.)
(b) List the items in the fact situation that were not used to determine the answer to (a), showing the pertinent amounts and supporting computations in good form for each item. In addition, indicate where, or if, these items should be included in Lobo’s financial statements.
(AICPA adapted)
Click here for the solution: Selected accounts included in the property, plant, and equipment section of Lobo Corporation’s balance sheet at December 31, 2009
Land $ 300,000
Land improvements 140,000
Buildings 1,100,000
Machinery and equipment 960,000
During 2010 the following transactions occurred.
1. A tract of land was acquired for $150,000 as a potential future building site.
2. A plant facility consisting of land and building was acquired from Mendota Company in exchange for 20,000 shares of Lobo’s common stock. On the acquisition date, Lobo’s stock had a closing market price of $37 per share on a national stock exchange. The plant facility was carried on Mendota’s books at $110,000 for land and $320,000 for the building at the exchange date. Current appraised values for the land and building, respectively, are $230,000 and $690,000.
3. Items of machinery and equipment were purchased at a total cost of $400,000. Additional costs were incurred as follows.
Freight and unloading $13,000
Sales taxes 20,000
Installation 26,000
4. Expenditures totaling $95,000 were made for new parking lots, streets, and sidewalks at the corporation’s various plant locations. These expenditures had an estimated useful life of 15 years.
5. A machine costing $80,000 on January 1, 2002, was scrapped on June 30, 2010. Double-declining balance depreciation has been recorded on the basis of a 10-year life.
6. A machine was sold for $20,000 on July 1, 2010. Original cost of the machine was $44,000 on January 1, 2007, and it was depreciated on the straight-line basis over an estimated useful life of 7 years and a salvage value of $2,000.
Instructions
(a) Prepare a detailed analysis of the changes in each of the following balance sheet accounts for 2010.
Land
Land improvements
Buildings
Machinery and equipment
(Hint: Disregard the related accumulated depreciation accounts.)
(b) List the items in the fact situation that were not used to determine the answer to (a), showing the pertinent amounts and supporting computations in good form for each item. In addition, indicate where, or if, these items should be included in Lobo’s financial statements.
(AICPA adapted)
Click here for the solution: Selected accounts included in the property, plant, and equipment section of Lobo Corporation’s balance sheet at December 31, 2009
Armada Company has these comparative balance sheet data
Armada Company has these comparative balance sheet data:
ARMADA COMPANY
Balance Sheets
December 31
2010 2009
Cash $25,000 $ 30,000
Receivables (net) 65,000 60,000
Inventories 60,000 50,000
Plant assets (net) 200,000 180,000
$350,000 $320,000
Accounts payable $50,000 $60,000
Mortgage payable (15%) 100,000 100,000
Common stock, $10 par 140,000 120,000
Retained earnings 60,000 40,000
$350,000 $320,000
Additional information for 2010:
1. Net income was $25,000.
2. Sales on account were $375,000. Sales returns and allowances amounted to $25,000.
3. Cost of goods sold was $198,000.
4. Net cash provided by operating activities was $48,000.
5. Capital expenditures were $25,000, and cash dividends were $18,000.
Compute the following ratios at December 31, 2010.
Current Ratio
Receivables turnover times
Average collection period days
Inventory turnover times
Days in inventory days
Cash debt coverage times
Current cash debt coverage times
Free cash flow
Click here for the solution: Armada Company has these comparative balance sheet data
ARMADA COMPANY
Balance Sheets
December 31
2010 2009
Cash $25,000 $ 30,000
Receivables (net) 65,000 60,000
Inventories 60,000 50,000
Plant assets (net) 200,000 180,000
$350,000 $320,000
Accounts payable $50,000 $60,000
Mortgage payable (15%) 100,000 100,000
Common stock, $10 par 140,000 120,000
Retained earnings 60,000 40,000
$350,000 $320,000
Additional information for 2010:
1. Net income was $25,000.
2. Sales on account were $375,000. Sales returns and allowances amounted to $25,000.
3. Cost of goods sold was $198,000.
4. Net cash provided by operating activities was $48,000.
5. Capital expenditures were $25,000, and cash dividends were $18,000.
Compute the following ratios at December 31, 2010.
Current Ratio
Receivables turnover times
Average collection period days
Inventory turnover times
Days in inventory days
Cash debt coverage times
Current cash debt coverage times
Free cash flow
Click here for the solution: Armada Company has these comparative balance sheet data
Sunday, September 27, 2015
At December 31, 2009, certain accounts included in the property, plant, and equipment section of Reagan Company's balance sheet
P10-1 (Classification of Acquisition and Other Asset Costs) At December 31, 2009, certain accounts included in the property, plant, and equipment section of Reagan Company's balance sheet had the following balances.
Land $230,000
Buildings 890,000
Leasehold improvements 660,000
Machinery and equipment 875,000
During 2010 the following transactions occurred.
1. Land site number 621 was acquired for $850,000. In addition, to acquire the land Reagan paid a $51,000 commission to a real estate agent. Costs of $35,000 were incurred to clear the land. During the course of clearing the land, timber and gravel were recovered and sold for $13,000.
2. A second tract of land (site number 622) with a building was acquired for $420,000. The closing statement indicated that the land value was $300,000 and the building value was $120,000. Shortly after acquisition, the building was demolished at a cost of $41,000. A new building was constructed for $330,000 plus the following costs.
Excavation fees $38,000
Architectural design fees 11,000
Building permit fee 2,500
Imputed interest on funds used during construction (stock financing) 8,500
The building was completed and occupied on September 30, 2010.
3. A third tract of land (site number 623) was acquired for $650,000 and was put on the market for resale.
4. During December 2010 costs of $89,000 were incurred to improve leased office space. The related lease will terminate on December 31, 2012, and is not expected to be renewed. (Hint: Leasehold improvements should be handled in the same manner as land improvements.)
5. A group of new machines was purchased under a royalty agreement that provides for payment of royalties based on units of production for the machines. The invoice price of the machines was $87,000, freight costs were $3,300, installation costs were $2,400, and royalty payments for 2010 were $17,500.
Instructions
(a) Prepare a detailed analysis of the changes in each of the following balance sheet accounts for 2010.
Land Leasehold improvements
Buildings Machinery and equipment
Disregard the related accumulated depreciation accounts.
(b) List the items in the situation that were not used to determine the answer to (a) above, and indicate where, or if, these items should be included in Reagan's financial statements.
Click here for the solution: At December 31, 2009, certain accounts included in the property, plant, and equipment section of Reagan Company's balance sheet
Land $230,000
Buildings 890,000
Leasehold improvements 660,000
Machinery and equipment 875,000
During 2010 the following transactions occurred.
1. Land site number 621 was acquired for $850,000. In addition, to acquire the land Reagan paid a $51,000 commission to a real estate agent. Costs of $35,000 were incurred to clear the land. During the course of clearing the land, timber and gravel were recovered and sold for $13,000.
2. A second tract of land (site number 622) with a building was acquired for $420,000. The closing statement indicated that the land value was $300,000 and the building value was $120,000. Shortly after acquisition, the building was demolished at a cost of $41,000. A new building was constructed for $330,000 plus the following costs.
Excavation fees $38,000
Architectural design fees 11,000
Building permit fee 2,500
Imputed interest on funds used during construction (stock financing) 8,500
The building was completed and occupied on September 30, 2010.
3. A third tract of land (site number 623) was acquired for $650,000 and was put on the market for resale.
4. During December 2010 costs of $89,000 were incurred to improve leased office space. The related lease will terminate on December 31, 2012, and is not expected to be renewed. (Hint: Leasehold improvements should be handled in the same manner as land improvements.)
5. A group of new machines was purchased under a royalty agreement that provides for payment of royalties based on units of production for the machines. The invoice price of the machines was $87,000, freight costs were $3,300, installation costs were $2,400, and royalty payments for 2010 were $17,500.
Instructions
(a) Prepare a detailed analysis of the changes in each of the following balance sheet accounts for 2010.
Land Leasehold improvements
Buildings Machinery and equipment
Disregard the related accumulated depreciation accounts.
(b) List the items in the situation that were not used to determine the answer to (a) above, and indicate where, or if, these items should be included in Reagan's financial statements.
Click here for the solution: At December 31, 2009, certain accounts included in the property, plant, and equipment section of Reagan Company's balance sheet
Friday, September 25, 2015
Glendo Industries' balance sheet at December 31, 2008, is presented below (ACC 560 Week 6)
ACC 560 Week 6 Assignment
P9-6A Glendo Industries' balance sheet at December 31, 2008, is presented below.
GLENDO INDUSTRIES
Balance Sheet
December 31, 2008
Assets
Current assets
Cash $7,500
Accounts receivable 82,500
Finished goods inventory (2,000 units) 30,000
Total current assets 120,000
Property, plant, and equipment
Equipment $40,000
Less: Accumulated depreciation 10,000 30,000
Total assets $150,000
Liabilities and Stockholders' Equity
Liabilities
Notes payable $25,000
Accounts payable 45,000
Total liabilities 70,000
Stockholders' equity
Common stock $50,000
Retained earnings 30,000
Total stockholders' equity 80,000
Total liabilities and stockholders' equity $150,000
Additional information accumulated for the budgeting process is as follows.
Budgeted data for the year 2009 include the following.
4th Qtr.
of 2009 Year 2009
Total
Sales budget (8,000 units at $35) $84,000 $280,000
Direct materials used 17,000 69,400
Direct labor 12,500 56,600
Manufacturing overhead applied 10,000 54,000
Selling and administrative expenses 18,000 76,000
To meet sales requirements and to have 3,000 units of finished goods on hand at December 31, 2009, the production budget shows 9,000 required units of output. The total unit cost of production is expected to be $20. Glendo Industries uses the first-in, first-out (FIFO) inventory costing method. Selling and administrative expenses include $4,000 for depreciation on equipment. Interest expense is expected to be $3,500 for the year. Income taxes are expected to be 30% of income before income taxes.
All sales and purchases are on account. It is expected that 60% of quarterly sales are collected in cash within the quarter and the remainder is collected in the following quarter. Direct materials purchased from suppliers are paid 50% in the quarter incurred and the remainder in the following quarter. Purchases in the fourth quarter were the same as the materials used. In 2009, the company expects to purchase additional equipment costing $19,000. It expects to pay $8,000 on notes payable plus all interest due and payable to December 31 (included in interest expense $3,500, above). Accounts payable at December 31, 2009, includes amounts due suppliers (see above) plus other accounts payable of $5,700. In 2009, the company expects to declare and pay a $5,000 cash dividend. Unpaid income taxes at December 31 will be $5,000.The company's cash budget shows an expected cash balance of $7,950 at December 31, 2009.
Instructions
Prepare a budgeted income statement for 2009 and a budgeted balance sheet at December 31, 2009. In preparing the income statement, you will need to compute cost of goods manufactured (direct materials + direct labor + manufacturing overhead) and finished goods inventory (December 31, 2009).
Click here for the solution: Glendo Industries' balance sheet at December 31, 2008, is presented below (ACC 560 Week 6)
P9-6A Glendo Industries' balance sheet at December 31, 2008, is presented below.
GLENDO INDUSTRIES
Balance Sheet
December 31, 2008
Assets
Current assets
Cash $7,500
Accounts receivable 82,500
Finished goods inventory (2,000 units) 30,000
Total current assets 120,000
Property, plant, and equipment
Equipment $40,000
Less: Accumulated depreciation 10,000 30,000
Total assets $150,000
Liabilities and Stockholders' Equity
Liabilities
Notes payable $25,000
Accounts payable 45,000
Total liabilities 70,000
Stockholders' equity
Common stock $50,000
Retained earnings 30,000
Total stockholders' equity 80,000
Total liabilities and stockholders' equity $150,000
Additional information accumulated for the budgeting process is as follows.
Budgeted data for the year 2009 include the following.
4th Qtr.
of 2009 Year 2009
Total
Sales budget (8,000 units at $35) $84,000 $280,000
Direct materials used 17,000 69,400
Direct labor 12,500 56,600
Manufacturing overhead applied 10,000 54,000
Selling and administrative expenses 18,000 76,000
To meet sales requirements and to have 3,000 units of finished goods on hand at December 31, 2009, the production budget shows 9,000 required units of output. The total unit cost of production is expected to be $20. Glendo Industries uses the first-in, first-out (FIFO) inventory costing method. Selling and administrative expenses include $4,000 for depreciation on equipment. Interest expense is expected to be $3,500 for the year. Income taxes are expected to be 30% of income before income taxes.
All sales and purchases are on account. It is expected that 60% of quarterly sales are collected in cash within the quarter and the remainder is collected in the following quarter. Direct materials purchased from suppliers are paid 50% in the quarter incurred and the remainder in the following quarter. Purchases in the fourth quarter were the same as the materials used. In 2009, the company expects to purchase additional equipment costing $19,000. It expects to pay $8,000 on notes payable plus all interest due and payable to December 31 (included in interest expense $3,500, above). Accounts payable at December 31, 2009, includes amounts due suppliers (see above) plus other accounts payable of $5,700. In 2009, the company expects to declare and pay a $5,000 cash dividend. Unpaid income taxes at December 31 will be $5,000.The company's cash budget shows an expected cash balance of $7,950 at December 31, 2009.
Instructions
Prepare a budgeted income statement for 2009 and a budgeted balance sheet at December 31, 2009. In preparing the income statement, you will need to compute cost of goods manufactured (direct materials + direct labor + manufacturing overhead) and finished goods inventory (December 31, 2009).
Click here for the solution: Glendo Industries' balance sheet at December 31, 2008, is presented below (ACC 560 Week 6)
Thursday, September 24, 2015
(Mini Case) The balance sheet that follows indicates the capital structure for Nealon Inc
Assignment:
Weighted Average Cost
Complete the Mini Case on page 368 and submit to instructor. In parts "a" and "b" clearly label the calculation of the required ratios and solve using Excel. Use formulas to calculate the ratios and format the cells to insert a comma if there is more than three numbers. Round to two decimal places. No narrative analysis is called for, so clearly label the calculations so that management will be able to comprehend them.
Mini Case
The balance sheet that follows indicates the capital structure for Nealon Inc. Flotation costs are (a) 15 percent of market value for a new bond issue, and (b) $2.01 per share for preferred stock. The dividends for common stock were $2.50 last year and are projected to have an annual growth rate of 6 percent. The firm is in a 34 percent tax bracket. What is the weighted average cost of capital if the firm’s finances are in the following proportions?
TYPE OF FINANCING PERCENTAGE OF FUTURE FINANCING
Bonds (8%, $1000 par, 16-year maturity) 38%
Preferred Stock (5,000 shares outstanding, $50 par, $1.50 dividend) 15%
Common Equity 47%
Total 100%
a. Market prices are $1,035 for bonds, $19 for preferred stock, and $35 for common stock. There will be sufficient internal common equity funding (i.e. retained earnings) available such that the firm does not plan to issue new common stock. Calculate the firm’s weighted average cost of capital.
b. In part a we assumed that Nealon would have sufficient retained earnings such that it would not need to sell additional common stock to finance its new investments. Consider the situation now, when Nealon’s retained earnings anticipated or the coming year are expected to fall short of the equity requirement of 47 percent of new capital raised. Consequently, the firm foresees the possibility that new common shares will have to be issued. To facilitate the sale of shares, Nealon’s investment banker has advised management that they should expect a price discount of approximately 7 percent, or $2.45 per share. Under these terms, the new shares should provide net proceeds of about $32.55. What is Nealon’s cost of equity capital when new shares are sold, and what is the weighted average cost of the added funds involved in the issuance of new shares?
Click here for the solution: (Mini Case) The balance sheet that follows indicates the capital structure for Nealon Inc
Weighted Average Cost
Complete the Mini Case on page 368 and submit to instructor. In parts "a" and "b" clearly label the calculation of the required ratios and solve using Excel. Use formulas to calculate the ratios and format the cells to insert a comma if there is more than three numbers. Round to two decimal places. No narrative analysis is called for, so clearly label the calculations so that management will be able to comprehend them.
Mini Case
The balance sheet that follows indicates the capital structure for Nealon Inc. Flotation costs are (a) 15 percent of market value for a new bond issue, and (b) $2.01 per share for preferred stock. The dividends for common stock were $2.50 last year and are projected to have an annual growth rate of 6 percent. The firm is in a 34 percent tax bracket. What is the weighted average cost of capital if the firm’s finances are in the following proportions?
TYPE OF FINANCING PERCENTAGE OF FUTURE FINANCING
Bonds (8%, $1000 par, 16-year maturity) 38%
Preferred Stock (5,000 shares outstanding, $50 par, $1.50 dividend) 15%
Common Equity 47%
Total 100%
a. Market prices are $1,035 for bonds, $19 for preferred stock, and $35 for common stock. There will be sufficient internal common equity funding (i.e. retained earnings) available such that the firm does not plan to issue new common stock. Calculate the firm’s weighted average cost of capital.
b. In part a we assumed that Nealon would have sufficient retained earnings such that it would not need to sell additional common stock to finance its new investments. Consider the situation now, when Nealon’s retained earnings anticipated or the coming year are expected to fall short of the equity requirement of 47 percent of new capital raised. Consequently, the firm foresees the possibility that new common shares will have to be issued. To facilitate the sale of shares, Nealon’s investment banker has advised management that they should expect a price discount of approximately 7 percent, or $2.45 per share. Under these terms, the new shares should provide net proceeds of about $32.55. What is Nealon’s cost of equity capital when new shares are sold, and what is the weighted average cost of the added funds involved in the issuance of new shares?
Click here for the solution: (Mini Case) The balance sheet that follows indicates the capital structure for Nealon Inc
Wednesday, September 23, 2015
The following items were taken from the balance sheet of Nike, Inc
The following items were taken from the balance sheet of Nike, Inc.
1. Cash $828.0
2. Accounts receivable 2,120.2
3. Common stock 890.6
4. Notes payable 146.0
5. Other assets 1,722.9
6. Other liabilities 2,081 .9
7. Inventories 1,633.6
8. Income taxes payable 118.2
9. Property, plant, and equipment 1,586.9
10. Retained earnings 3,891.1
11. Accounts payable 763.8
Instruction
a. Classify each of these items as an asset, liability, or stockholder equity.
b. Determine Nike's accounting equation by calculating the value of total assets, total liabilities, and total stockholders equity.
c. To what extent does Nike rely on debt versus equity financing?
Click here for the solution: The following items were taken from the balance sheet of Nike, Inc
1. Cash $828.0
2. Accounts receivable 2,120.2
3. Common stock 890.6
4. Notes payable 146.0
5. Other assets 1,722.9
6. Other liabilities 2,081 .9
7. Inventories 1,633.6
8. Income taxes payable 118.2
9. Property, plant, and equipment 1,586.9
10. Retained earnings 3,891.1
11. Accounts payable 763.8
Instruction
a. Classify each of these items as an asset, liability, or stockholder equity.
b. Determine Nike's accounting equation by calculating the value of total assets, total liabilities, and total stockholders equity.
c. To what extent does Nike rely on debt versus equity financing?
Click here for the solution: The following items were taken from the balance sheet of Nike, Inc
Sunday, September 20, 2015
Condensed balance sheet and income statement data for Kersenbrock Corporation appear below
P14-3A Condensed balance sheet and income statement data for Kersenbrock Corporation appear below.
KERSENBROCK CORPORATION
Balance Sheets
December 31
2009 2008 2007
Cash $ 25,000 $ 20,000 $ 18,000
Receivables (net) 50,000 45,000 48,000
Other current assets 90,000 95,000 64,000
Investments 75,000 70,000 45,000
Plant and equipment (net) 400,000 370,000 358,000
$640,000 $600,000 $533,000
Current liabilities $ 75,000 $ 80,000 $ 70,000
Long-term debt 80,000 85,000 50,000
Common stock, $10 par 340,000 310,000 300,000
Retained earnings 145,000 125,000 113,000
$640,000 $600,000 $533,000
KERSENBROCK CORPORATION
Income Statement
For the Year Ended December 31
2009 2008
Sales $740,000 $700,000
Less: Sales returns and allowances 40,000 50,000
Net sales 700,000 650,000
Cost of goods sold 420,000 400,000
Gross profit 280,000 250,000
Operating expenses (including income taxes) 235,000 220,000
Net income $ 45,000 $ 30,000
Additional information:
1. The market price of Kersenbrock's common stock was $4.00, $5.00, and $8.00 for 2007, 2008, and 2009, respectively.
2. All dividends were paid in cash.
Instructions
a) Compute the following ratios for 2008 and 2009. (1) Profit margin. (2) Asset turnover. (3) Earnings per share. (Weighted average common shares in 2009 were 32,000 and in 2008 were 31,000.) (4) Price-earnings. (5) Payout. (6) Debt to total assets.
b) Based on the ratios calculated, discuss briefly the improvement or lack thereof in financial position and operating results from 2008 to 2009 of Kersenbrock Corporation.
Click here for the solution: Condensed balance sheet and income statement data for Kersenbrock Corporation appear below
KERSENBROCK CORPORATION
Balance Sheets
December 31
2009 2008 2007
Cash $ 25,000 $ 20,000 $ 18,000
Receivables (net) 50,000 45,000 48,000
Other current assets 90,000 95,000 64,000
Investments 75,000 70,000 45,000
Plant and equipment (net) 400,000 370,000 358,000
$640,000 $600,000 $533,000
Current liabilities $ 75,000 $ 80,000 $ 70,000
Long-term debt 80,000 85,000 50,000
Common stock, $10 par 340,000 310,000 300,000
Retained earnings 145,000 125,000 113,000
$640,000 $600,000 $533,000
KERSENBROCK CORPORATION
Income Statement
For the Year Ended December 31
2009 2008
Sales $740,000 $700,000
Less: Sales returns and allowances 40,000 50,000
Net sales 700,000 650,000
Cost of goods sold 420,000 400,000
Gross profit 280,000 250,000
Operating expenses (including income taxes) 235,000 220,000
Net income $ 45,000 $ 30,000
Additional information:
1. The market price of Kersenbrock's common stock was $4.00, $5.00, and $8.00 for 2007, 2008, and 2009, respectively.
2. All dividends were paid in cash.
Instructions
a) Compute the following ratios for 2008 and 2009. (1) Profit margin. (2) Asset turnover. (3) Earnings per share. (Weighted average common shares in 2009 were 32,000 and in 2008 were 31,000.) (4) Price-earnings. (5) Payout. (6) Debt to total assets.
b) Based on the ratios calculated, discuss briefly the improvement or lack thereof in financial position and operating results from 2008 to 2009 of Kersenbrock Corporation.
Click here for the solution: Condensed balance sheet and income statement data for Kersenbrock Corporation appear below
The following balance sheet was prepared by the bookkeeper for Blue Company as of December 31, 2011
The following balance sheet was prepared by the bookkeeper for Blue Company as of December 31, 2011
Blue Company
Balance Sheet
as of December 31, 2011
Cash $90,000
Accounts receivable (net) 42,000
Inventories 57,000
Equipment (net) 96,000
Patents 32,000
Sub-Total 393,500
Accounts payable 75,000
Long-term liabilities 100,000
Stockholders' equity 218,500
Sub-Total 393,500
The following additional information is provided:
1) Cash includes the cash surrender value of a life insurance policy $5,000 and a bank overdraft of $4,000 has been deducted.
2) The net accounts receivable balance includes:
a) Accounts receivable debit balances $50,000
b) Accounts receivable credit balances 0
c) Allowance for doubtful accounts 3,800
3) Inventories do not include goods costing $3,000 shipped out on consignment. Receivables of $3,000 were recorded on these goods.
4) Investments include investments in common stock, trading $13,000 and available-for-sale $46,300 and franchises $17,000
INSTRUCTIONS
Prepare a balance sheet in good form (Stockholders' equity details can be omitted)
Do not worry about balancing the statement but rather compute the account balances properly for presentation purposes.
Click here for the solution: The following balance sheet was prepared by the bookkeeper for Blue Company as of December 31, 2011
Blue Company
Balance Sheet
as of December 31, 2011
Cash $90,000
Accounts receivable (net) 42,000
Inventories 57,000
Equipment (net) 96,000
Patents 32,000
Sub-Total 393,500
Accounts payable 75,000
Long-term liabilities 100,000
Stockholders' equity 218,500
Sub-Total 393,500
The following additional information is provided:
1) Cash includes the cash surrender value of a life insurance policy $5,000 and a bank overdraft of $4,000 has been deducted.
2) The net accounts receivable balance includes:
a) Accounts receivable debit balances $50,000
b) Accounts receivable credit balances 0
c) Allowance for doubtful accounts 3,800
3) Inventories do not include goods costing $3,000 shipped out on consignment. Receivables of $3,000 were recorded on these goods.
4) Investments include investments in common stock, trading $13,000 and available-for-sale $46,300 and franchises $17,000
INSTRUCTIONS
Prepare a balance sheet in good form (Stockholders' equity details can be omitted)
Do not worry about balancing the statement but rather compute the account balances properly for presentation purposes.
Click here for the solution: The following balance sheet was prepared by the bookkeeper for Blue Company as of December 31, 2011
Friday, September 18, 2015
The following information was made available from the income statement and balance sheet of Lauren Company
1. The following information was made available from the income statement and balance sheet of Lauren Company.
Item 12/31/10 12/31/09
Accounts Receivable $53,400 58,600
Accounts Payable 35,600 32,700
Merchandise Inventory 85,000 79,000
Sales (2010) 243,000
Interest Revenue (2010) 5,600
Dividend Revenue (2010) 1,200
Tax Expense (2010) 12,300
Salaries Expense (2010) 28,000
COGS (2010) 65,000
Interest Expense (2010) 3,600
Operating Expenses 28,500
Complete the cash flow from operating activities section for Lauren Company using the direct method for the year ended December 31, 2010.
Click here for the solution: The following information was made available from the income statement and balance sheet of Lauren Company
Item 12/31/10 12/31/09
Accounts Receivable $53,400 58,600
Accounts Payable 35,600 32,700
Merchandise Inventory 85,000 79,000
Sales (2010) 243,000
Interest Revenue (2010) 5,600
Dividend Revenue (2010) 1,200
Tax Expense (2010) 12,300
Salaries Expense (2010) 28,000
COGS (2010) 65,000
Interest Expense (2010) 3,600
Operating Expenses 28,500
Complete the cash flow from operating activities section for Lauren Company using the direct method for the year ended December 31, 2010.
Click here for the solution: The following information was made available from the income statement and balance sheet of Lauren Company
Jill's Bike: Given the following balance sheet, complete a horizontal analysis
2. Given the following balance sheet, complete a horizontal analysis. Compute the percentage to the nearest tenth of a percent.
Jill’s Bikes
Comparative Balance Sheet
For Years Ended December 31, 2011 and 2010
(in thousands) 2011 2010 Difference Percentage
Assets
Current Assets
Cash and Equivalents $72 $94
Accounts Receivable, net 122 104
Inventory 288 232
Total Current Assets 482 430
Property, Plant and Equipment 638 358
Total Assets $1,120 $788
Liabilities
Current Liabilities
Accounts Payable $242 $148
Accrued Liabilities 48 66
Total Current Liabilities 290 214
Long-Term Liabilities 346 208
Total Liabilities 636 422
Stockholders’ Equity
Common Stock 70 60
Retained Earnings 414 306
Total Stockholders’ Equity 484 366
Total Liabilities and
Stockholders’ Equity $1,120 $788
Click here for the solution: Record the following transactions using the accounting equation
Jill’s Bikes
Comparative Balance Sheet
For Years Ended December 31, 2011 and 2010
(in thousands) 2011 2010 Difference Percentage
Assets
Current Assets
Cash and Equivalents $72 $94
Accounts Receivable, net 122 104
Inventory 288 232
Total Current Assets 482 430
Property, Plant and Equipment 638 358
Total Assets $1,120 $788
Liabilities
Current Liabilities
Accounts Payable $242 $148
Accrued Liabilities 48 66
Total Current Liabilities 290 214
Long-Term Liabilities 346 208
Total Liabilities 636 422
Stockholders’ Equity
Common Stock 70 60
Retained Earnings 414 306
Total Stockholders’ Equity 484 366
Total Liabilities and
Stockholders’ Equity $1,120 $788
Click here for the solution: Record the following transactions using the accounting equation
Given the following information, prepare a balance sheet for Isaiah’s Tool Shed for the year ending December 31, 2012
6. Given the following information, prepare a balance sheet for Isaiah’s Tool Shed for the year ending December 31, 2012.
Cash $65,750 Retained Earnings $179,319
Common Stock $35,000 Equipment $27,500
Accounts Receivable $11,478 Accounts Payable $29,450
Land $30,000 Inventory $78,311
Prepaid Supplies $7,357 Income Taxes Payable $4,209
Office Computers $11,345 Other PPE $31,446
Accum. Depr. (all) $23,459 Prepaid Insurance $8,250
Click here for the solution: Given the following information, prepare a balance sheet for Isaiah’s Tool Shed for the year ending December 31, 2012
Cash $65,750 Retained Earnings $179,319
Common Stock $35,000 Equipment $27,500
Accounts Receivable $11,478 Accounts Payable $29,450
Land $30,000 Inventory $78,311
Prepaid Supplies $7,357 Income Taxes Payable $4,209
Office Computers $11,345 Other PPE $31,446
Accum. Depr. (all) $23,459 Prepaid Insurance $8,250
Click here for the solution: Given the following information, prepare a balance sheet for Isaiah’s Tool Shed for the year ending December 31, 2012
Complete an Income Statement, Statement of Owner's Equity, and Balance Sheet using the information provided below for Rya’s Planning Services
Complete an Income Statement, Statement of Owner's Equity, and Balance Sheet using the information provided below for Rya’s Planning Services.
Cash………………………………….$21,500
Accounts Receivable………. 17,500
Office Supplies……………… … 500
Equipment…………………… …….15,000
Accounts Payable…………… . 9,750
Rya Page, Capital……………....28,200
Rya Page, Drawing……………… 5,000
Planning Fees Income……… …26,250
Office Supplies Expense……….. 200
Rent Expense……………………… … 800
Salaries Expense……………… …. 3,000
Utilities Expense……………… ….. 700
Click here for the solution: Complete an Income Statement, Statement of Owner's Equity, and Balance Sheet using the information provided below for Rya’s Planning Services
Cash………………………………….$21,500
Accounts Receivable………. 17,500
Office Supplies……………… … 500
Equipment…………………… …….15,000
Accounts Payable…………… . 9,750
Rya Page, Capital……………....28,200
Rya Page, Drawing……………… 5,000
Planning Fees Income……… …26,250
Office Supplies Expense……….. 200
Rent Expense……………………… … 800
Salaries Expense……………… …. 3,000
Utilities Expense……………… ….. 700
Click here for the solution: Complete an Income Statement, Statement of Owner's Equity, and Balance Sheet using the information provided below for Rya’s Planning Services
Condensed balance sheet and income statement data for Kersenbrock Corporation appear below
P15-3A Condensed balance sheet and income statement data for Kersenbrock Corporation appear below.
KERSENBROCK CORPORATION
Balance Sheets
December 31
2009 2008 2007
Cash $ 25,000 $ 20,000 $ 18,000
Receivables (net) 50,000 45,000 48,000
Other current assets 90,000 95,000 64,000
Investments 75,000 70,000 45,000
Plant and equipment (net) 400,000 370,000 358,000
$640,000 $600,000 $533,000
Current liabilities $ 75,000 $ 80,000 $ 70,000
Long-term debt 80,000 85,000 50,000
Common stock, $10 par 340,000 310,000 300,000
Retained earnings 145,000 125,000 113,000
$640,000 $600,000 $533,000
KERSENBROCK CORPORATION
Income Statement
For the Year Ended December 31
2009 2008
Sales $740,000 $700,000
Less: Sales returns and allowances 40,000 50,000
Net sales 700,000 650,000
Cost of goods sold 420,000 400,000
Gross profit 280,000 250,000
Operating expenses (including income taxes) 235,000 220,000
Net income $ 45,000 $ 30,000
Additional information:
1. The market price of Kersenbrock's common stock was $4.00, $5.00, and $8.00 for 2007, 2008, and 2009, respectively.
2. All dividends were paid in cash.
Instructions
a) Compute the following ratios for 2008 and 2009. (1) Profit margin. (2) Asset turnover. (3) Earnings per share. (Weighted average common shares in 2009 were 32,000 and in 2008 were 31,000.) (4) Price-earnings. (5) Payout. (6) Debt to total assets.
b) Based on the ratios calculated, discuss briefly the improvement or lack thereof in financial position and operating results from 2008 to 2009 of Kersenbrock Corporation.
Click here for the solution: Condensed balance sheet and income statement data for Kersenbrock Corporation appear below
KERSENBROCK CORPORATION
Balance Sheets
December 31
2009 2008 2007
Cash $ 25,000 $ 20,000 $ 18,000
Receivables (net) 50,000 45,000 48,000
Other current assets 90,000 95,000 64,000
Investments 75,000 70,000 45,000
Plant and equipment (net) 400,000 370,000 358,000
$640,000 $600,000 $533,000
Current liabilities $ 75,000 $ 80,000 $ 70,000
Long-term debt 80,000 85,000 50,000
Common stock, $10 par 340,000 310,000 300,000
Retained earnings 145,000 125,000 113,000
$640,000 $600,000 $533,000
KERSENBROCK CORPORATION
Income Statement
For the Year Ended December 31
2009 2008
Sales $740,000 $700,000
Less: Sales returns and allowances 40,000 50,000
Net sales 700,000 650,000
Cost of goods sold 420,000 400,000
Gross profit 280,000 250,000
Operating expenses (including income taxes) 235,000 220,000
Net income $ 45,000 $ 30,000
Additional information:
1. The market price of Kersenbrock's common stock was $4.00, $5.00, and $8.00 for 2007, 2008, and 2009, respectively.
2. All dividends were paid in cash.
Instructions
a) Compute the following ratios for 2008 and 2009. (1) Profit margin. (2) Asset turnover. (3) Earnings per share. (Weighted average common shares in 2009 were 32,000 and in 2008 were 31,000.) (4) Price-earnings. (5) Payout. (6) Debt to total assets.
b) Based on the ratios calculated, discuss briefly the improvement or lack thereof in financial position and operating results from 2008 to 2009 of Kersenbrock Corporation.
Click here for the solution: Condensed balance sheet and income statement data for Kersenbrock Corporation appear below
Tuesday, September 15, 2015
The comparative balance sheet of TorMax Technology, Inc. at December 31, 2010 and 2009, is as follows
PR 16-2B The comparative balance sheet of TorMax Technology, Inc. at December 31, 2010 and 2009, is as follows
AND SO ON
Check: Net Cash Flow from Operating Activities $200,500
Click here for the solution: The comparative balance sheet of TorMax Technology, Inc. at December 31, 2010 and 2009, is as follows
AND SO ON
Check: Net Cash Flow from Operating Activities $200,500
Click here for the solution: The comparative balance sheet of TorMax Technology, Inc. at December 31, 2010 and 2009, is as follows
Thursday, September 10, 2015
The balance sheet of Consolidated Paper, Inc., included the following shareholders' equity accounts at December 31, 2010
E 18-23 Transactions affecting retained earnings
The balance sheet of Consolidated Paper, Inc., included the following shareholders' equity accounts at December 31, 2010:
During 2011, several events and transactions affected the retained earnings of Consolidated Paper.
Required:
1. Prepare the appropriate entries for these events:
a. On March 3 the board of directors declared a property dividend of 240,000 shares of Leasco International common stock that Consolidated Paper had purchased in January as an investment (book value: $700,000). The investment shares had a fair value of $3 per share and were distributed March 31 to shareholders of record March 15.
b. On May 3 a 5-for-4 stock split was declared and distributed. The stock split was effected in the form of a 25% stock dividend. The market value of the $1 par common stock was $11 per share.
c. On July 5 a 2% common stock dividend was declared and distributed. The market value of the common stock was $11 per share.
d. On December 1 the board of directors declared the 8.8% cash dividend on the 90,000 preferred shares, payable on December 28 to shareholders of record December 20.
e. On December 1 the board of directors declared a cash dividend of $.50 per share on its common shares, payable on December 28 to shareholders of record December 20.
2. Prepare the shareholders' equity section of the balance sheet for Consolidated Paper, Inc., for the year ended at December 31, 2011. Net income for the year was $810,000.
Click here for the solution: The balance sheet of Consolidated Paper, Inc., included the following shareholders' equity accounts at December 31, 2010
The balance sheet of Consolidated Paper, Inc., included the following shareholders' equity accounts at December 31, 2010:
During 2011, several events and transactions affected the retained earnings of Consolidated Paper.
Required:
1. Prepare the appropriate entries for these events:
a. On March 3 the board of directors declared a property dividend of 240,000 shares of Leasco International common stock that Consolidated Paper had purchased in January as an investment (book value: $700,000). The investment shares had a fair value of $3 per share and were distributed March 31 to shareholders of record March 15.
b. On May 3 a 5-for-4 stock split was declared and distributed. The stock split was effected in the form of a 25% stock dividend. The market value of the $1 par common stock was $11 per share.
c. On July 5 a 2% common stock dividend was declared and distributed. The market value of the common stock was $11 per share.
d. On December 1 the board of directors declared the 8.8% cash dividend on the 90,000 preferred shares, payable on December 28 to shareholders of record December 20.
e. On December 1 the board of directors declared a cash dividend of $.50 per share on its common shares, payable on December 28 to shareholders of record December 20.
2. Prepare the shareholders' equity section of the balance sheet for Consolidated Paper, Inc., for the year ended at December 31, 2011. Net income for the year was $810,000.
Click here for the solution: The balance sheet of Consolidated Paper, Inc., included the following shareholders' equity accounts at December 31, 2010
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