Chapter 11 Comprehensive Problem 3 Selected transactions completed by Blackwell Company during its first fiscal year ending December 31 were as follow:
Jan. 2. Issued a check to establish a petty cash fund of $2,000.
Mar. 4. Replenished the petty cash fund, based on the following summary of petty cash receipts: office supplies, $789; miscellaneous selling expense, $256; miscellaneous administrative expense, $378.
AND SO ON
Click here for the solution: Selected transactions completed by Blackwell Company during its first fiscal year ending December 31 were as follow (Chapter 11 Comprehensive Problem 3)
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Showing posts with label follow. Show all posts
Sunday, September 27, 2015
Wednesday, September 23, 2015
Comparative financial statement data of Danfield, Inc., follow
P15-26A Using ratios to evaluate a stock investment
Comparative financial statement data of Danfield, Inc., follow:
DANFIELD, INC.
Comparative Income Statement
Years Ended December 31, 2012 and 2011
2012 2011
Net Sales $467,000 $428,000
Cost of goods sold 237,000 218,000
Gross profit $230,000 $210,000
Operating expenses 136,000 134,000
Income from operations $94, 000 $76, 000
Interest expense 9,000 10,000
Income before income tax $85,000 $66,000
Income tax expenses 24,000 27,000
Net income $61,000 $39, 000
DANFIELD, INC.
Comparative Income Statement
Years Ended December 31, 2012 and 2011
2012 2011 2010*
Current assets:
Cash $97,000 $95,000
Current recievables, net 112,000 118,000 $102,000
Inventories 145,000 163,000 203,000
Prepaid expenses 12,000 5,000
Total current assets $366,000 $381,000
Property, plant, and equipment, net 211,000 179,000
Total assets $577,000 $560,000 598,000
Total current liabilities $225,000 $246,000
Total liabilities $339,000 $343,000
Preferred stock, 3% 108, 000 108,000
Common stockholders’ equity , no par 130,000 109, 000
Total liabilities and stockholders’ equity $577,000 $560,000
• Selected 2010 amounts
1. Market price of Danfield’s common stock: $86.58 at December 31, 2012, and $46.54 at December 31, 2011.
2. Common shares outstanding: 12, 000 during 2012 and 10,000 during 2011 and 2010.
3. All sales on credit.
Requirements
1. Compute the following ratios for 2012 and 2011:
a. Current ratio
b. Times-interest earned ratio
c. Inventory turnover
d. Gross profit percentage
e. Debt to equity ratio
f. Rate of return on common stockholder’s equity
g. Earnings per share of common stock
h. Price/earnings ratio
2. Decide (a) whether Danfield’s ability to pay debts and to sell inventory improved or deteriorated during 2012 and (b) whether the investment attractiveness of its common stock appears to have increased or decreased.
Click here for the solution: Comparative financial statement data of Danfield, Inc., follow
Comparative financial statement data of Danfield, Inc., follow:
DANFIELD, INC.
Comparative Income Statement
Years Ended December 31, 2012 and 2011
2012 2011
Net Sales $467,000 $428,000
Cost of goods sold 237,000 218,000
Gross profit $230,000 $210,000
Operating expenses 136,000 134,000
Income from operations $94, 000 $76, 000
Interest expense 9,000 10,000
Income before income tax $85,000 $66,000
Income tax expenses 24,000 27,000
Net income $61,000 $39, 000
DANFIELD, INC.
Comparative Income Statement
Years Ended December 31, 2012 and 2011
2012 2011 2010*
Current assets:
Cash $97,000 $95,000
Current recievables, net 112,000 118,000 $102,000
Inventories 145,000 163,000 203,000
Prepaid expenses 12,000 5,000
Total current assets $366,000 $381,000
Property, plant, and equipment, net 211,000 179,000
Total assets $577,000 $560,000 598,000
Total current liabilities $225,000 $246,000
Total liabilities $339,000 $343,000
Preferred stock, 3% 108, 000 108,000
Common stockholders’ equity , no par 130,000 109, 000
Total liabilities and stockholders’ equity $577,000 $560,000
• Selected 2010 amounts
1. Market price of Danfield’s common stock: $86.58 at December 31, 2012, and $46.54 at December 31, 2011.
2. Common shares outstanding: 12, 000 during 2012 and 10,000 during 2011 and 2010.
3. All sales on credit.
Requirements
1. Compute the following ratios for 2012 and 2011:
a. Current ratio
b. Times-interest earned ratio
c. Inventory turnover
d. Gross profit percentage
e. Debt to equity ratio
f. Rate of return on common stockholder’s equity
g. Earnings per share of common stock
h. Price/earnings ratio
2. Decide (a) whether Danfield’s ability to pay debts and to sell inventory improved or deteriorated during 2012 and (b) whether the investment attractiveness of its common stock appears to have increased or decreased.
Click here for the solution: Comparative financial statement data of Danfield, Inc., follow
Sunday, September 13, 2015
Estimated cost and operating data for three companies for the upcoming year follow
Estimated cost and operating data for three companies for the upcoming year follow:
Company X Company Y Company Z
Direct labor-hours 80,000 45,000 60,000
Machine-hours 30,000 70,000 21,000
Direct materials cost $400,000 $290,000 $300,000
Manufacturing overhead cost $536,000 $315,000 $480,000
Predetermined overhead rates are computed using the following allocation bases in the three companies:
Allocation Base
Company X Direct labor-hours
Company Y Machine-hours
Company Z Direct materials cost
1. Compute each company's predetermined overhead rate.
2. Assume that Company X works on three jobs during the upcoming year. Direct labor-hours recorded by job are: Job 418, 12,000 hours; Job 419, 36,000 hours; and Job 420, 30,000 hours. How much overhead will the company apply to Work in Process for the year? If actual overhead costs total $530,000 for the year, will overhead be underapplied or overapplied? By how much?
Click here for the solution: Estimated cost and operating data for three companies for the upcoming year follow
Company X Company Y Company Z
Direct labor-hours 80,000 45,000 60,000
Machine-hours 30,000 70,000 21,000
Direct materials cost $400,000 $290,000 $300,000
Manufacturing overhead cost $536,000 $315,000 $480,000
Predetermined overhead rates are computed using the following allocation bases in the three companies:
Allocation Base
Company X Direct labor-hours
Company Y Machine-hours
Company Z Direct materials cost
1. Compute each company's predetermined overhead rate.
2. Assume that Company X works on three jobs during the upcoming year. Direct labor-hours recorded by job are: Job 418, 12,000 hours; Job 419, 36,000 hours; and Job 420, 30,000 hours. How much overhead will the company apply to Work in Process for the year? If actual overhead costs total $530,000 for the year, will overhead be underapplied or overapplied? By how much?
Click here for the solution: Estimated cost and operating data for three companies for the upcoming year follow
Wednesday, September 2, 2015
The comparative balance sheets for Redwood Corporation for 2011 and 2012 follow
The comparative balance sheets for Redwood Corporation for 2011 and 2012 follow:
Balance Sheets
As of December 31
2011
Assets
Cash 40,600
Accounts Receivable 22,000
Merchandise Inventory 176,000
Prepaid Rent 4,800
Equipment 288,000
Accumulated Depreciation (236,000)
Land 80,000
Total Assets $375,400
2012
Assets
Cash 68,800
Accounts Receivable 30,000
Merchandise Inventory 160,000
Prepaid Rent 2,400
Equipment 256,000
Accumulated Depreciation (146,800)
Land 192,000
Total Assets $562,400
Liabilities
2011
Accts Payable (Inventory) 76,000
Salaries Payable 24,000
2012
Accts Payable (Inventory) 67,000
Salaries Payable 28,000
2011
Stockholders Equity
Common Stock, $25 par value 200,000
Retained Earnings 75,400
Total Liabilities and Stockholders Equity 375,400
2012
Stockholders Equity
Common Stock, $25 par value 250,000
Retained Earnings 217,400
Total Liabilities and Stockholders Equity 562,400
Income Statement
For the Year Ended December 31, 2012
Sales Revenue 1,500,000
Cost of Goods Sold (797,200)
Gross Profit 702,800
Operating Expense
Depreciation expense (22,800)
Rent expense (24,000)
Salaries expense (256,000)
Other operating expense (258,000)
Net Income $142,000
Other information
1. Purchased land for $112,000
2. Purchased new equipment for $100,000
3. Sold old equipment that cost $132,000 with accumulated depreciation of $112,000 for $20,000 cash.
4. Issued Common Stock for $50,000
Required
Prepare the statement of cash flows for 2012 using the indirect method.
Click here for the solution: The comparative balance sheets for Redwood Corporation for 2011 and 2012 follow
Balance Sheets
As of December 31
2011
Assets
Cash 40,600
Accounts Receivable 22,000
Merchandise Inventory 176,000
Prepaid Rent 4,800
Equipment 288,000
Accumulated Depreciation (236,000)
Land 80,000
Total Assets $375,400
2012
Assets
Cash 68,800
Accounts Receivable 30,000
Merchandise Inventory 160,000
Prepaid Rent 2,400
Equipment 256,000
Accumulated Depreciation (146,800)
Land 192,000
Total Assets $562,400
Liabilities
2011
Accts Payable (Inventory) 76,000
Salaries Payable 24,000
2012
Accts Payable (Inventory) 67,000
Salaries Payable 28,000
2011
Stockholders Equity
Common Stock, $25 par value 200,000
Retained Earnings 75,400
Total Liabilities and Stockholders Equity 375,400
2012
Stockholders Equity
Common Stock, $25 par value 250,000
Retained Earnings 217,400
Total Liabilities and Stockholders Equity 562,400
Income Statement
For the Year Ended December 31, 2012
Sales Revenue 1,500,000
Cost of Goods Sold (797,200)
Gross Profit 702,800
Operating Expense
Depreciation expense (22,800)
Rent expense (24,000)
Salaries expense (256,000)
Other operating expense (258,000)
Net Income $142,000
Other information
1. Purchased land for $112,000
2. Purchased new equipment for $100,000
3. Sold old equipment that cost $132,000 with accumulated depreciation of $112,000 for $20,000 cash.
4. Issued Common Stock for $50,000
Required
Prepare the statement of cash flows for 2012 using the indirect method.
Click here for the solution: The comparative balance sheets for Redwood Corporation for 2011 and 2012 follow
Tuesday, August 4, 2015
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
Great City Builders, Inc., balance sheet data at May 31, 2012, and June 30, 2012, follow
E1-18 Using the accounting equation to analyze business transactions
Great City Builders, Inc., balance sheet data at May 31, 2012, and June 30, 2012, follow:
May 31, 2012 June 30, 2012
Total assets $177,000 $213,000
Total liabilities $ 122,000 $144,000
Requirement
1. Following are three situations about stockholders’ investments and dividends of
the business during June. For each situation, compute the amount of net income
or net loss during June 2012.
a. The company issued $6,000 of common stock and paid no dividends.
b. The company issued no common stock. It paid dividends of $10,000.
c. The company issued $18,000 of common stock and paid dividends of $20,000.
Click here for the solution: Great City Builders, Inc., balance sheet data at May 31, 2012, and June 30, 2012, follow
Great City Builders, Inc., balance sheet data at May 31, 2012, and June 30, 2012, follow:
May 31, 2012 June 30, 2012
Total assets $177,000 $213,000
Total liabilities $ 122,000 $144,000
Requirement
1. Following are three situations about stockholders’ investments and dividends of
the business during June. For each situation, compute the amount of net income
or net loss during June 2012.
a. The company issued $6,000 of common stock and paid no dividends.
b. The company issued no common stock. It paid dividends of $10,000.
c. The company issued $18,000 of common stock and paid dividends of $20,000.
Click here for the solution: Great City Builders, Inc., balance sheet data at May 31, 2012, and June 30, 2012, 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, July 11, 2015
Selected year-end financial statements of McCord Corporation follow
Selected year-end financial statements of McCord Corporation follow. (Note: All sales are on credit; selected balance sheet amounts at December 31, 2004, were inventory, $32,400; total assets, $182,400; common stock, $90,000; and retained earnings, $31,300.)
McCORD CORPORATION
Income Statement
For Year Ended December 31, 2005
Sales . . . . . . . . . . . . . . . . . . . $348,600
Cost of goods sold . . . . . . . . 229,150
Gross profit . . . . . . . . . . . . . 119,450
Operating expenses . . . . . . . . 52,500
Interest expense . . . . . . . . . . 3,100
Income before taxes . . . . . . . 63,850
Income taxes . . . . . . . . . . . . . 15,800
Net income . . . . . . . . . . . . . . $ 48,050
McCORD CORPORATION
Balance Sheet
December 31, 2005
Assets Liabilities and Equity
Cash . . . . . . . . . . . . . . . . . . . . . . $ 9,000 Accounts payable . . . . . . . . . . . . . . . . . . $ 16,500
Short-term investments . . . . . . . . . 7,400 Accrued wages payable . . . . . . . . . . . . . . 2,200
Accounts receivable, net . . . . . . . . 28,200 Income taxes payable . . . . . . . . . . . . . . . . 2,300
Notes receivable (trade)* . . . . . . . . 3,500 Long-term note payable, secured
Merchandise inventory . . . . . . . . . . 31,150 by mortgage on plant assets . . . . . . . . . 62,400
Prepaid expenses . . . . . . . . . . . . . . 1,650 Common stock, $1 par value . . . . . . . . . . 90,000
Plant assets, net . . . . . . . . . . . . . . . 152,300 Retained earnings . . . . . . . . . . . . . . . . . . 59,800
Total assets . . . . . . . . . . . . . . . . . . $233,200 Total liabilities and equity . . . . . . . . . . . . . $233,200
Click here for the solution: Selected year-end financial statements of McCord Corporation follow
McCORD CORPORATION
Income Statement
For Year Ended December 31, 2005
Sales . . . . . . . . . . . . . . . . . . . $348,600
Cost of goods sold . . . . . . . . 229,150
Gross profit . . . . . . . . . . . . . 119,450
Operating expenses . . . . . . . . 52,500
Interest expense . . . . . . . . . . 3,100
Income before taxes . . . . . . . 63,850
Income taxes . . . . . . . . . . . . . 15,800
Net income . . . . . . . . . . . . . . $ 48,050
McCORD CORPORATION
Balance Sheet
December 31, 2005
Assets Liabilities and Equity
Cash . . . . . . . . . . . . . . . . . . . . . . $ 9,000 Accounts payable . . . . . . . . . . . . . . . . . . $ 16,500
Short-term investments . . . . . . . . . 7,400 Accrued wages payable . . . . . . . . . . . . . . 2,200
Accounts receivable, net . . . . . . . . 28,200 Income taxes payable . . . . . . . . . . . . . . . . 2,300
Notes receivable (trade)* . . . . . . . . 3,500 Long-term note payable, secured
Merchandise inventory . . . . . . . . . . 31,150 by mortgage on plant assets . . . . . . . . . 62,400
Prepaid expenses . . . . . . . . . . . . . . 1,650 Common stock, $1 par value . . . . . . . . . . 90,000
Plant assets, net . . . . . . . . . . . . . . . 152,300 Retained earnings . . . . . . . . . . . . . . . . . . 59,800
Total assets . . . . . . . . . . . . . . . . . . $233,200 Total liabilities and equity . . . . . . . . . . . . . $233,200
Click here for the solution: Selected year-end financial statements of McCord Corporation follow
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