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 condensed. Show all posts
Showing posts with label condensed. Show all posts
Thursday, January 14, 2016
Sunday, September 27, 2015
A condensed income statement by product line for British Beverage Inc. indicated the following for Royal Cola for the past year
EX 9-2 A condensed income statement by product line for British Beverage Inc. indicated the following for Royal Cola for the past year:
Sales $254,000
Cost of the goods sold $122,000
Gross profit $132,000
Operating expenses $156,000
Loss from operations ($24,000)
It is estimated that 16% of the cost of goods sold represents fixed factory overhead costs and that 20% of the operating expenses are fixed. Since Royal Cola is only one of many products, the fixed costs will not be materially affected if the product is discontinued.
a. Prepare a differential analysis report, dated March 3, 2010, for the proposed discontinuance of Royal Cola.
b. Should Royal Cola be retained?
Click here for the solution: A condensed income statement by product line for British Beverage Inc. indicated the following for Royal Cola for the past year
Sales $254,000
Cost of the goods sold $122,000
Gross profit $132,000
Operating expenses $156,000
Loss from operations ($24,000)
It is estimated that 16% of the cost of goods sold represents fixed factory overhead costs and that 20% of the operating expenses are fixed. Since Royal Cola is only one of many products, the fixed costs will not be materially affected if the product is discontinued.
a. Prepare a differential analysis report, dated March 3, 2010, for the proposed discontinuance of Royal Cola.
b. Should Royal Cola be retained?
Click here for the solution: A condensed income statement by product line for British Beverage Inc. indicated the following for Royal Cola for the past year
Thursday, September 24, 2015
The comparative condensed income statements of Hendi Corporation are shown below
ACC 560 Week 10 Assignment
E14-4 The comparative condensed income statements of Hendi Corporation are shown below.
HENDI CORPORATION
Comparative Condensed Income Statements
For the Years Ended December 31
2009 2008
Net sales $600,000 $500,000
Cost of goods sold 483,000 420,000
Gross profit 117,000 80,000
Operating expenses 57,200 44,000
Net income $ 59,800 $ 36,000
Instructions
a) Prepare a horizontal analysis of the income statement data for Hendi Corporation using 2008 as a base. (Show the amounts of increase or decrease.)
b) Prepare a vertical analysis of the income statement data for Hendi Corporation in columnar form for both years.
Click here for the solution: The comparative condensed income statements of Hendi Corporation are shown below
E14-4 The comparative condensed income statements of Hendi Corporation are shown below.
HENDI CORPORATION
Comparative Condensed Income Statements
For the Years Ended December 31
2009 2008
Net sales $600,000 $500,000
Cost of goods sold 483,000 420,000
Gross profit 117,000 80,000
Operating expenses 57,200 44,000
Net income $ 59,800 $ 36,000
Instructions
a) Prepare a horizontal analysis of the income statement data for Hendi Corporation using 2008 as a base. (Show the amounts of increase or decrease.)
b) Prepare a vertical analysis of the income statement data for Hendi Corporation in columnar form for both years.
Click here for the solution: The comparative condensed income statements of Hendi Corporation are shown below
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
Friday, September 18, 2015
The comparative condensed balance sheets of Conard Corporation are presented below
ACC 291 Week 5 Assignment
E14-3 The comparative condensed balance sheets of Conard Corporation are presented below.
CONARD CORPORATION
Comparative Condensed Balance Sheets
December 31
Assets
Current assets $ 74,000 $ 80,000
Property, plant, and equipment (net) 99,000 90,000
Intangibles 27,000 40,000
Total assets $200,000 $210,000
Liabilities and stockholders’ equity
Current liabilities $ 42,000 $ 48,000
Long-term liabilities 143,000 150,000
Stockholders’ equity 15,000 12,000
Total liabilities and stockholders’ equity $200,000 $210,000
Instructions
1. Prepare a horizontal analysis of the balance sheet data for Conard Corporation using 2011 as a base.
2. Prepare a vertical analysis of the balance sheet data for Conard Corporation in columnar form for 2012.
CONARD CORPORATION
Comparative Condensed Balance Sheets
December 31
Assets
Current assets $ 74,000 $ 80,000
Property, plant, and equipment (net) 99,000 90,000
Intangibles 27,000 40,000
Total assets $200,000 $210,000
Liabilities and stockholders’ equity
Current liabilities $ 42,000 $ 48,000
Long-term liabilities 143,000 150,000
Stockholders’ equity 15,000 12,000
Total liabilities and stockholders’ equity $200,000 $210,000
Instructions
1. Prepare a horizontal analysis of the balance sheet data for Conard Corporation using 2011 as a base.
2. Prepare a vertical analysis of the balance sheet data for Conard Corporation in columnar form for 2012.
Click here for the solution: The comparative condensed balance sheets of Conard Corporation are presented below
The comparative condensed income statements of Hendi Corporation are shown below
E15-4 The comparative condensed income statements of Hendi Corporation are shown below.
HENDI CORPORATION
Comparative Condensed Income Statements
For the Years Ended December 31
2009 2008
Net sales $600,000 $500,000
Cost of goods sold 483,000 420,000
Gross profit 117,000 80,000
Operating expenses 57,200 44,000
Net income $ 59,800 $ 36,000
Instructions
a) Prepare a horizontal analysis of the income statement data for Hendi Corporation using 2008 as a base. (Show the amounts of increase or decrease.)
b) Prepare a vertical analysis of the income statement data for Hendi Corporation in columnar form for both years.
Click here for the solution: The comparative condensed income statements of Hendi Corporation are shown below
HENDI CORPORATION
Comparative Condensed Income Statements
For the Years Ended December 31
2009 2008
Net sales $600,000 $500,000
Cost of goods sold 483,000 420,000
Gross profit 117,000 80,000
Operating expenses 57,200 44,000
Net income $ 59,800 $ 36,000
Instructions
a) Prepare a horizontal analysis of the income statement data for Hendi Corporation using 2008 as a base. (Show the amounts of increase or decrease.)
b) Prepare a vertical analysis of the income statement data for Hendi Corporation in columnar form for both years.
Click here for the solution: The comparative condensed income statements of Hendi Corporation are shown below
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
Friday, August 14, 2015
The condensed financial statements of Westward Corporation for 2009 and 2008 are presented below
The condensed financial statements of Westward Corporation for 2009 and 2008 are presented below.
Westward Corporation Westward Corporation
Balance Sheet Income Statement
December 31, 2009 For the Year Ended December 31, 2009
Assets Revenues $2,000,000
Current assets Expenses
Cash and temporary Cost of goods sold 1,080,000
investments $ 30,000 Selling and administrative
Accounts receivable 70,000 expenses 495,000
Inventories 120,000 Interest expense 30,000
Total current assets 220,000 Total expenses 1,605,000
Property, plant, and Income before income taxes 395,000
equipment (net) 780,000 Income tax expense 140,000
Total assets $1,000,000 Net income $ 255,000
Liabilities and Stockholders' Equity
Current liabilities $ 80,000
Long-term liabilities 300,000
Common stockholders' equity 620,000
Total liabilities and
stockholders' equity $1,000,000
Westward Corporation Westward Corporation
Balance Sheet Income Statement
December 31, 2008 For the Year Ended December 31, 2008
Assets Revenues $2,500,000
Current assets Expenses
Cash and temporary Cost of goods sold 1,750,000
investments $ 40,000 Selling and administrative
Accounts receivable 90,000 expenses 500,000
Inventories 150,000 Interest expense 30,000
Total current assets 280,000 Total expenses 2,280,000
Property, plant, and Income before income taxes 220,000
equipment (net) 800,000 Income tax expense 77,000
Total assets $1,080,000 Net income $ 143,000
Liabilities and Stockholders' Equity
Current liabilities $ 140,000
Long-term liabilities 320,000
Common stockholders' equity 620,000
Total liabilities and
stockholders' equity $1,080,000
Select data from fiscal year 2007:
Inventory: $100,000
Total assets: $900,000
Stockholders’ Equity: $540,000
Instructions
1. Compute the following listed ratios for 2009 and 2008 showing supporting calculations. (5.2 points)
a. Current ratio
b. Debt to total Assets
c. Times interest earned
d. Inventory turnover
e. Profit margin ratio
f. Return on common stockholders' equity
g. Return on assets
2. Perform horizontal and vertical analysis on Westward’s financial statements, show your results. (3.0 points)
3. Assess the financial performance of Westward, given the analysis tools used in questions 1 and 2 above. (5.3 points)
4. If the company wanted to perform industry comparison analysis, what references would you recommend it use? (1.5 points)
Click here for the solution: The condensed financial statements of Westward Corporation for 2009 and 2008 are presented below
Westward Corporation Westward Corporation
Balance Sheet Income Statement
December 31, 2009 For the Year Ended December 31, 2009
Assets Revenues $2,000,000
Current assets Expenses
Cash and temporary Cost of goods sold 1,080,000
investments $ 30,000 Selling and administrative
Accounts receivable 70,000 expenses 495,000
Inventories 120,000 Interest expense 30,000
Total current assets 220,000 Total expenses 1,605,000
Property, plant, and Income before income taxes 395,000
equipment (net) 780,000 Income tax expense 140,000
Total assets $1,000,000 Net income $ 255,000
Liabilities and Stockholders' Equity
Current liabilities $ 80,000
Long-term liabilities 300,000
Common stockholders' equity 620,000
Total liabilities and
stockholders' equity $1,000,000
Westward Corporation Westward Corporation
Balance Sheet Income Statement
December 31, 2008 For the Year Ended December 31, 2008
Assets Revenues $2,500,000
Current assets Expenses
Cash and temporary Cost of goods sold 1,750,000
investments $ 40,000 Selling and administrative
Accounts receivable 90,000 expenses 500,000
Inventories 150,000 Interest expense 30,000
Total current assets 280,000 Total expenses 2,280,000
Property, plant, and Income before income taxes 220,000
equipment (net) 800,000 Income tax expense 77,000
Total assets $1,080,000 Net income $ 143,000
Liabilities and Stockholders' Equity
Current liabilities $ 140,000
Long-term liabilities 320,000
Common stockholders' equity 620,000
Total liabilities and
stockholders' equity $1,080,000
Select data from fiscal year 2007:
Inventory: $100,000
Total assets: $900,000
Stockholders’ Equity: $540,000
Instructions
1. Compute the following listed ratios for 2009 and 2008 showing supporting calculations. (5.2 points)
a. Current ratio
b. Debt to total Assets
c. Times interest earned
d. Inventory turnover
e. Profit margin ratio
f. Return on common stockholders' equity
g. Return on assets
2. Perform horizontal and vertical analysis on Westward’s financial statements, show your results. (3.0 points)
3. Assess the financial performance of Westward, given the analysis tools used in questions 1 and 2 above. (5.3 points)
4. If the company wanted to perform industry comparison analysis, what references would you recommend it use? (1.5 points)
Click here for the solution: The condensed financial statements of Westward Corporation for 2009 and 2008 are presented below
Tuesday, August 4, 2015
Retzlaff Company’s income statement contained the condensed information below
P12-5A Retzlaff Company’s income statement contained the condensed information below.
RETZLAFF COMPANY
Income Statement
For the Year Ended December 31, 2012
Revenues $970,000
Operating expenses, excluding depreciation $614,000
Depreciation expense 55,000
Loss on sale of equipment 16,000 685,000
Income before income taxes 285,000
Income tax expense 56,000
Net income $229,000
Retzlaff’s balance sheet contained the comparative data at December 31.
2012 2011
Accounts receivable $70,000 $60,000
Accounts payable 41,000 32,000
Income taxes payable 13,000 7,000
Accounts payable pertain to operating expenses.
Instructions
Prepare the operating activities section of the statement of cash flows using the indirect method.
Check: Cash from operations $305,000
RETZLAFF COMPANY
Income Statement
For the Year Ended December 31, 2012
Revenues $970,000
Operating expenses, excluding depreciation $614,000
Depreciation expense 55,000
Loss on sale of equipment 16,000 685,000
Income before income taxes 285,000
Income tax expense 56,000
Net income $229,000
Retzlaff’s balance sheet contained the comparative data at December 31.
2012 2011
Accounts receivable $70,000 $60,000
Accounts payable 41,000 32,000
Income taxes payable 13,000 7,000
Accounts payable pertain to operating expenses.
Instructions
Prepare the operating activities section of the statement of cash flows using the indirect method.
Check: Cash from operations $305,000
Condensed financial data of Lemere Inc. follow
P12-9A Condensed financial data of Lemere Inc. follow.
LEMERE INC.
Comparative Balance Sheets
December 31
Assets 2012 2011
Cash $ 80,800 $ 48,400
Accounts receivable 87,800 38,000
Inventory 112,500 102,850
Prepaid expenses 28,400 26,000
Long-term investments 138,000 109,000
Plant assets 285,000 242,500
Accumulated depreciation (50,000) (52,000)
Total $682,500 $514,750
Liabilities and Stockholders’ Equity
Accounts payable $102,000 $ 67,300
Accrued expenses payable 16,500 21,000
Bonds payable 110,000 146,000
Common stock 220,000 175,000
Retained earnings 234,000 105,450
Total $682,500 $514,750
LEMERE INC.
Income Statement Data
For the Year Ended December 31, 2012
Sales $388,460
Less:
Cost of goods sold $135,460
Operating expenses, excluding depreciation 12,410
Depreciation expense 46,500
Income taxes 27,280
Interest expense 4,730
Loss on sale of plant assets 7,500 233,880
Net income $154,580
Additional information:
1. New plant assets costing $100,000 were purchased for cash during the year.
2. Old plant assets having an original cost of $57,500 and accumulated depreciation of $48,500 were sold for $1,500 cash.
3. Bonds payable matured and were paid off at face value for cash.
4. A cash dividend of $26,030 was declared and paid during the year.
Instructions
Prepare a statement of cash flows using the indirect method.
Check: Cash from operations $176,930
Click here for the solution: Condensed financial data of Lemere Inc. follow
LEMERE INC.
Comparative Balance Sheets
December 31
Assets 2012 2011
Cash $ 80,800 $ 48,400
Accounts receivable 87,800 38,000
Inventory 112,500 102,850
Prepaid expenses 28,400 26,000
Long-term investments 138,000 109,000
Plant assets 285,000 242,500
Accumulated depreciation (50,000) (52,000)
Total $682,500 $514,750
Liabilities and Stockholders’ Equity
Accounts payable $102,000 $ 67,300
Accrued expenses payable 16,500 21,000
Bonds payable 110,000 146,000
Common stock 220,000 175,000
Retained earnings 234,000 105,450
Total $682,500 $514,750
LEMERE INC.
Income Statement Data
For the Year Ended December 31, 2012
Sales $388,460
Less:
Cost of goods sold $135,460
Operating expenses, excluding depreciation 12,410
Depreciation expense 46,500
Income taxes 27,280
Interest expense 4,730
Loss on sale of plant assets 7,500 233,880
Net income $154,580
Additional information:
1. New plant assets costing $100,000 were purchased for cash during the year.
2. Old plant assets having an original cost of $57,500 and accumulated depreciation of $48,500 were sold for $1,500 cash.
3. Bonds payable matured and were paid off at face value for cash.
4. A cash dividend of $26,030 was declared and paid during the year.
Instructions
Prepare a statement of cash flows using the indirect method.
Check: Cash from operations $176,930
Click here for the solution: Condensed financial data of Lemere Inc. follow
Monday, August 3, 2015
P13-9A Condensed financial data of Arma Inc. follow.
P13-9A Condensed financial data of Arma Inc. follow.
ARMA INC.
Comparative Balance Sheets
December 31
Assets
2011 2010
Cash $90,800 $48,400
Accounts receivable 92,800 33,000
Inventories 112,500 102,850
Prepaid expenses 28,400 26,000
Investments 138,000 114,000
Plant assets 270,000 242,500
Accumulated depreciation (50,000) (52,000)
Total $682,500 $514,750
Liabilities and Stockholders' Equity
Accounts payable $112,000 $67,300
Accrued expenses payable 16,500 17,000
Bonds payable 110,000 150,000
Common stock 220,000 175,000
Retained earnings 224,000 105,450
Total $682,500 $514,750
ARMA INC.
Income Statement
For the Year Ended December 31, 2011
Sales $392,780
Less:
Cost of goods sold $135,460
Operating expenses, excluding depreciation 12,410
Depreciation expense 46,500
Income taxes 27,280
Interest expense 4,730
Loss on sale of plant assets 7,500 233,880
Net income $158,900
Additional information:
New plant assets costing $85,000 were purchased for cash during the year.
Old plant assets having an original cost of $57,500 were sold for $1,500 cash.
Bonds matured and were paid off at face value for cash.
A cash dividend of $40,350 was declared and paid during the year.
Complete the statement of cash flows using the indirect method.
Click here for the solution: P13-9A Condensed financial data of Arma Inc. follow
ARMA INC.
Comparative Balance Sheets
December 31
Assets
2011 2010
Cash $90,800 $48,400
Accounts receivable 92,800 33,000
Inventories 112,500 102,850
Prepaid expenses 28,400 26,000
Investments 138,000 114,000
Plant assets 270,000 242,500
Accumulated depreciation (50,000) (52,000)
Total $682,500 $514,750
Liabilities and Stockholders' Equity
Accounts payable $112,000 $67,300
Accrued expenses payable 16,500 17,000
Bonds payable 110,000 150,000
Common stock 220,000 175,000
Retained earnings 224,000 105,450
Total $682,500 $514,750
ARMA INC.
Income Statement
For the Year Ended December 31, 2011
Sales $392,780
Less:
Cost of goods sold $135,460
Operating expenses, excluding depreciation 12,410
Depreciation expense 46,500
Income taxes 27,280
Interest expense 4,730
Loss on sale of plant assets 7,500 233,880
Net income $158,900
Additional information:
New plant assets costing $85,000 were purchased for cash during the year.
Old plant assets having an original cost of $57,500 were sold for $1,500 cash.
Bonds matured and were paid off at face value for cash.
A cash dividend of $40,350 was declared and paid during the year.
Complete the statement of cash flows using the indirect method.
Click here for the solution: P13-9A Condensed financial data of Arma Inc. follow
Saturday, August 1, 2015
Presented below is a condensed version of the comparative balance sheets for Sondergaard Corporation for the last two years at December 31
E5-15 (Preparation of a Statement of Cash Flows) Presented below is a condensed version of the comparative balance sheets for Sondergaard Corporation for the last two years at December 31.
2010 2009
Cash $157,000 $ 78,000
Accounts receivable 180,000 185,000
Investments 52,000 74,000
Equipment 298,000 240,000
Less: Accumulated depreciation (106,000) (89,000)
Current liabilities 134,000 151,000
Capital stock 160,000 160,000
Retained earnings 287,000 177,000
Additional information:
Investments were sold at a loss (not extraordinary) of $7,000; no equipment was sold; cash dividends paid were $50,000; and net income was $160,000.
Instructions
(a) Prepare a statement of cash flows for 2010 for Sondergaard Corporation.
(b) Determine Sondergaard Corporation’s free cash flow.
Click here for the solution: Presented below is a condensed version of the comparative balance sheets for Sondergaard Corporation for the last two years at December 31
2010 2009
Cash $157,000 $ 78,000
Accounts receivable 180,000 185,000
Investments 52,000 74,000
Equipment 298,000 240,000
Less: Accumulated depreciation (106,000) (89,000)
Current liabilities 134,000 151,000
Capital stock 160,000 160,000
Retained earnings 287,000 177,000
Additional information:
Investments were sold at a loss (not extraordinary) of $7,000; no equipment was sold; cash dividends paid were $50,000; and net income was $160,000.
Instructions
(a) Prepare a statement of cash flows for 2010 for Sondergaard Corporation.
(b) Determine Sondergaard Corporation’s free cash flow.
Click here for the solution: Presented below is a condensed version of the comparative balance sheets for Sondergaard Corporation for the last two years at December 31
Sunday, July 19, 2015
The condensed financial statements of Miller Company for the years 2007-2008 are presented below
The condensed financial statements of Miller Company for the years 2007-2008 are presented below:
Miller Company
Comparative Balance Sheets
As of December 31, 2008 and 2007
2008 2007
Cash $ 420,000 $ 120,000
Receivables (net) 460,000 300,000
Inventories 380,000 340,000
Plant and equipment 1,700,000 1,112,000
Accumulated depreciation (260,000) (192,000)
$2,700,000 $1,680,000
Accounts payable $ 240,000 $ 160,000
Dividends payable -0- 40,000
Bonds payable 400,000 -0-
Common stock ($10 par) 1,520,000 1,200,000
Retained earnings 540,000 280,000
$2,700,000 $1,680,000
Additional data:
Market value of stock at 12/31/08 is $80 per share.
Miller sold 32,000 shares of common stock at par on July 1, 2008.
Miller
Condensed Income Statement
For the Year Ended December 31, 2008
Sales $2,400,000
Cost of goods sold 1,600,000
Gross profit 800,000
Administrative and selling expense 500,000
Net income $ 300,000
Instructions
Compute the following financial ratios by placing the proper amounts in the parentheses provided for numerators and denominators.
Click here for the solution: The condensed financial statements of Miller Company for the years 2007-2008 are presented below
Miller Company
Comparative Balance Sheets
As of December 31, 2008 and 2007
2008 2007
Cash $ 420,000 $ 120,000
Receivables (net) 460,000 300,000
Inventories 380,000 340,000
Plant and equipment 1,700,000 1,112,000
Accumulated depreciation (260,000) (192,000)
$2,700,000 $1,680,000
Accounts payable $ 240,000 $ 160,000
Dividends payable -0- 40,000
Bonds payable 400,000 -0-
Common stock ($10 par) 1,520,000 1,200,000
Retained earnings 540,000 280,000
$2,700,000 $1,680,000
Additional data:
Market value of stock at 12/31/08 is $80 per share.
Miller sold 32,000 shares of common stock at par on July 1, 2008.
Miller
Condensed Income Statement
For the Year Ended December 31, 2008
Sales $2,400,000
Cost of goods sold 1,600,000
Gross profit 800,000
Administrative and selling expense 500,000
Net income $ 300,000
Instructions
Compute the following financial ratios by placing the proper amounts in the parentheses provided for numerators and denominators.
Click here for the solution: The condensed financial statements of Miller Company for the years 2007-2008 are presented below
Wednesday, July 15, 2015
Condensed financial data of Fairchild Company for 2010 and 2009 are presented below
E23-11 (SCF—Indirect Method) Condensed financial data of Fairchild Company for 2010 and 2009 are presented below.
FAIRCHILD COMPANY
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31, 2010 AND 2009
2011 2010
Cash $1,800 $1,100
Receivables 1,750 1,300
Inventory 1,600 1,900
Plant assets 1,900 1,700
Accumulated depreciation (1,200) (1,170)
Long-term investments (Held-to-maturity) 1,300 1,470
$7,150 $6,300
Accounts payable $1,200 $ 800
Accrued liabilities 200 250
Bonds payable 1,400 1,650
Capital stock 1,900 1,700
Retained earnings 2,450 1,900
$7,150 $6,300
FAIRCHILD COMPANY
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2010
Sales $6,900
Cost of goods sold 4,700
Gross margin 2,200
Selling and administrative expense 930
Income from operations 1,270
Other revenues and gains
Gain on sale of investments 80
Income before tax 1,350
Income tax expense 540
Net income $ 810
Additional information:
During the year, $70 of common stock was issued in exchange for plant assets. No plant assets were sold in 2010. Cash dividends were $260.
Instructions
Prepare a statement of cash flows using the indirect method.
Click here for the solution: Condensed financial data of Fairchild Company for 2010 and 2009 are presented below
FAIRCHILD COMPANY
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31, 2010 AND 2009
2011 2010
Cash $1,800 $1,100
Receivables 1,750 1,300
Inventory 1,600 1,900
Plant assets 1,900 1,700
Accumulated depreciation (1,200) (1,170)
Long-term investments (Held-to-maturity) 1,300 1,470
$7,150 $6,300
Accounts payable $1,200 $ 800
Accrued liabilities 200 250
Bonds payable 1,400 1,650
Capital stock 1,900 1,700
Retained earnings 2,450 1,900
$7,150 $6,300
FAIRCHILD COMPANY
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2010
Sales $6,900
Cost of goods sold 4,700
Gross margin 2,200
Selling and administrative expense 930
Income from operations 1,270
Other revenues and gains
Gain on sale of investments 80
Income before tax 1,350
Income tax expense 540
Net income $ 810
Additional information:
During the year, $70 of common stock was issued in exchange for plant assets. No plant assets were sold in 2010. Cash dividends were $260.
Instructions
Prepare a statement of cash flows using the indirect method.
Click here for the solution: Condensed financial data of Fairchild Company for 2010 and 2009 are presented below
Saturday, July 11, 2015
Condensed balance sheet and income statement data for Fellenz Corporation are presented below
P2-6B Condensed balance sheet and income statement data for Fellenz Corporation are presented below.
FELLENZ CORPORATION
Balance Sheets
December 31
Assets 2012 2011
Cash $ 40,000 $ 24,000
Receivables (net) 90,000 55,000
Other current assets 74,000 73,000
Long-term investments 78,000 60,000
Plant and equipment (net) 520,000 407,000
Total assets $802,000 $619,000
Liabilities and Stockholders’ Equity 2012 2011
Current liabilities $ 88,000 $ 65,000
Long-term debt 90,000 70,000
Common stock 370,000 320,000
Retained earnings 254,000 164,000
Total liabilities and stockholders’ equity $802,000 $619,000
FELLENZ CORPORATION
Income Statements
For the Years Ended December 31
2012 2011
Sales $770,000 $800,000
Cost of goods sold 420,000 400,000
Operating expenses (including income taxes) 200,000 237,000
Net income $150,000 $163,000
Cash from operating activities $165,000 $178,000
Cash used for capital expenditures 85,000 45,000
Dividends paid 50,000 43,000
Average number of shares outstanding 370,000 320,000
Instructions
Compute the following values and ratios for 2011 and 2012.
(a) Earnings per share.
(b) Working capital.
(c) Current ratio.
(d) Debt to total assets ratio.
(e) Free cash flow.
(f) Based on the ratios calculated, discuss briefly the improvement or lack thereof in the financial position and operating results of Fellenz from 2011 to 2012.
Click here for the solution: Condensed balance sheet and income statement data for Fellenz Corporation are presented below
FELLENZ CORPORATION
Balance Sheets
December 31
Assets 2012 2011
Cash $ 40,000 $ 24,000
Receivables (net) 90,000 55,000
Other current assets 74,000 73,000
Long-term investments 78,000 60,000
Plant and equipment (net) 520,000 407,000
Total assets $802,000 $619,000
Liabilities and Stockholders’ Equity 2012 2011
Current liabilities $ 88,000 $ 65,000
Long-term debt 90,000 70,000
Common stock 370,000 320,000
Retained earnings 254,000 164,000
Total liabilities and stockholders’ equity $802,000 $619,000
FELLENZ CORPORATION
Income Statements
For the Years Ended December 31
2012 2011
Sales $770,000 $800,000
Cost of goods sold 420,000 400,000
Operating expenses (including income taxes) 200,000 237,000
Net income $150,000 $163,000
Cash from operating activities $165,000 $178,000
Cash used for capital expenditures 85,000 45,000
Dividends paid 50,000 43,000
Average number of shares outstanding 370,000 320,000
Instructions
Compute the following values and ratios for 2011 and 2012.
(a) Earnings per share.
(b) Working capital.
(c) Current ratio.
(d) Debt to total assets ratio.
(e) Free cash flow.
(f) Based on the ratios calculated, discuss briefly the improvement or lack thereof in the financial position and operating results of Fellenz from 2011 to 2012.
Click here for the solution: Condensed balance sheet and income statement data for Fellenz Corporation are presented below
Thursday, July 2, 2015
The condensed financial statements of Leeward Corporation for 2006 and 2005 are presented below
The condensed financial statements of Leeward Corporation for 2006 and 2005 are presented below.
Leeward Corporation Leeward Corporation
Balance Sheet Income Statement
December 31, 2006 For the Year Ended December 31, 2006
Assets Revenues $2,500,000
Current assets Expenses
Cash and temporary Cost of goods sold 1,080,000
investments $ 50,000 Selling and administrative
Accounts receivable 70,000 expenses 495,000
Inventories 120,000 Interest expense 30,000
Total current assets 240,000 Total expenses 1,605,000
Property, plant, and Income before income taxes 895,000
equipment (net) 780,000 Income tax expense 268,500
Total assets $1,020,000 Net income $ 626,500
Liabilities and Stockholders' Equity
Current liabilities $ 100,000
Long-term liabilities 300,000
Common stockholders' equity 620,000
Total liabilities and stockholders' equity $1,020,000
Leeward Corporation Leeward Corporation
Balance Sheet Income Statement
December 31, 2005 For the Year Ended December 31, 2005
Assets Revenues $2,500,000
Current assets Expenses
Cash and temporary Cost of goods sold 1,750,000
investments $ 40,000 Selling and administrative
Accounts receivable 90,000 expenses 500,000
Inventories 150,000 Interest expense 30,000
Total current assets 280,000 Total expenses 2,280,000
Property, plant, and Income before income taxes 220,000
equipment (net) 800,000 Income tax expense 66,000
Total assets $1,080,000 Net income $ 154,000
Liabilities and Stockholders' Equity
Current liabilities $ 140,000
Long-term liabilities 320,000
Common stockholders' equity 620,000
Total liabilities and stockholders' equity $1,080,000
Instructions
1. Compute the following listed ratios for 2006.
(a) Current ratio = .
(b) Debt to total assets = .
(c) Profit margin ratio = .
(d) Return on common stockholders' equity = .
(e) Return on assets = .
2. Perform horizontal analysis on both the balance sheet and income statement.
3. Perform vertical analysis on both the balance sheet and income statement for 2005 and 2006.
4. Assess the financial performance of Leeward, using your analysis in #2 and #3 above. How have things changed from 2005 to 2006?
5. If the company wanted to perform industry comparison analysis, what references would you recommend it use?
Click here for the solution: The condensed financial statements of Leeward Corporation for 2006 and 2005 are presented below
Leeward Corporation Leeward Corporation
Balance Sheet Income Statement
December 31, 2006 For the Year Ended December 31, 2006
Assets Revenues $2,500,000
Current assets Expenses
Cash and temporary Cost of goods sold 1,080,000
investments $ 50,000 Selling and administrative
Accounts receivable 70,000 expenses 495,000
Inventories 120,000 Interest expense 30,000
Total current assets 240,000 Total expenses 1,605,000
Property, plant, and Income before income taxes 895,000
equipment (net) 780,000 Income tax expense 268,500
Total assets $1,020,000 Net income $ 626,500
Liabilities and Stockholders' Equity
Current liabilities $ 100,000
Long-term liabilities 300,000
Common stockholders' equity 620,000
Total liabilities and stockholders' equity $1,020,000
Leeward Corporation Leeward Corporation
Balance Sheet Income Statement
December 31, 2005 For the Year Ended December 31, 2005
Assets Revenues $2,500,000
Current assets Expenses
Cash and temporary Cost of goods sold 1,750,000
investments $ 40,000 Selling and administrative
Accounts receivable 90,000 expenses 500,000
Inventories 150,000 Interest expense 30,000
Total current assets 280,000 Total expenses 2,280,000
Property, plant, and Income before income taxes 220,000
equipment (net) 800,000 Income tax expense 66,000
Total assets $1,080,000 Net income $ 154,000
Liabilities and Stockholders' Equity
Current liabilities $ 140,000
Long-term liabilities 320,000
Common stockholders' equity 620,000
Total liabilities and stockholders' equity $1,080,000
Instructions
1. Compute the following listed ratios for 2006.
(a) Current ratio = .
(b) Debt to total assets = .
(c) Profit margin ratio = .
(d) Return on common stockholders' equity = .
(e) Return on assets = .
2. Perform horizontal analysis on both the balance sheet and income statement.
3. Perform vertical analysis on both the balance sheet and income statement for 2005 and 2006.
4. Assess the financial performance of Leeward, using your analysis in #2 and #3 above. How have things changed from 2005 to 2006?
5. If the company wanted to perform industry comparison analysis, what references would you recommend it use?
Click here for the solution: The condensed financial statements of Leeward Corporation for 2006 and 2005 are presented below
Wednesday, June 17, 2015
(SCF-Indirect Method) Condensed financial data of Pat Metheny Company for 2008 and 2007 are presented below
ACC 421 Week 5
Exercise 23-11 (E23-11) (SCF-Indirect Method) Condensed financial data of Pat Metheny Company for 2008 and 2007 are presented below
AND SO ON
Additional information:
During the year, $70 of common stock was issued in exchange for plant assets. No plant assets were sold in 2008.
Instructions
Prepare a statement of cash flows using the indirect method.
Click here for the solution: (SCF-Indirect Method) Condensed financial data of Pat Metheny Company for 2008 and 2007 are presented below
Exercise 23-11 (E23-11) (SCF-Indirect Method) Condensed financial data of Pat Metheny Company for 2008 and 2007 are presented below
AND SO ON
Additional information:
During the year, $70 of common stock was issued in exchange for plant assets. No plant assets were sold in 2008.
Instructions
Prepare a statement of cash flows using the indirect method.
Click here for the solution: (SCF-Indirect Method) Condensed financial data of Pat Metheny Company for 2008 and 2007 are presented below
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