Selected balances from a company's financial statements are shown below. Calculate the following ratios for 2012

Selected balances from a company's financial statements are shown below. Calculate the following ratios for 2012:

(a) accounts receivable turnover
(b) inventory turnover
(c) days' sales uncollected
(d) days' sales in inventory
(e) profit margin.
(f) return on total assets.

December 31 December 31
For the 2012 2011 Year 2012
Accounts receivable……………………. $ 27,000 $ 24,000
Merchandise inventory………………. 25,000 20,000
Total assets…………………………………. 296,000 244,000
Accounts payable………………………… 26,000 32,000
Salaries payable…………………………… 3,000 4,400
Sales (all on credit)………………………. $312,000
Cost of goods sold……………………….. 165,600
Salaries expenses………………………… 48,000
Other expenses…………………………… 75,000
Net income………………………………….. 24,000

Click here for the solution: Selected balances from a company's financial statements are shown below. Calculate the following ratios for 2012

The beginning inventory for Waldo Co and data on purchases and sales for a three-month period are shown in Problem 7-1A

PR 7-2A LIFO Perpetual Inventory

The beginning inventory for Waldo Co and data on purchases and sales for a three-month period are shown in Problem 7-1A.

Instructions
1. Record the inventory, purchases, and cost of merchandise sold data in a perpetual inventory record similar to the one illustrated in Exhibit 4, using the last-in, first-out method.
2. Determine the total sales, the total cost of merchandise sold, and the gross profit from sales for the period.
3. Determine the ending inventory cost.

Click here for the solution: The beginning inventory for Waldo Co and data on purchases and sales for a three-month period are shown in Problem 7-1A

Selected balances from a company's financial statements are shown below

Selected balances from a company's financial statements are shown below. Calculate the following ratios for 2012:

(a) accounts receivable turnover
(b) inventory turnover
(c) days' sales uncollected
(d) days' sales in inventory
(e) profit margin.
(f) return on total assets.

December 31 December 31
For the 2012 2011 Year 2012
Accounts receivable……………………. $ 27,000 $ 24,000
Merchandise inventory………………. 25,000 20,000
Total assets…………………………………. 296,000 244,000
Accounts payable………………………… 26,000 32,000
Salaries payable…………………………… 3,000 4,400
Sales (all on credit)………………………. $312,000
Cost of goods sold……………………….. 165,600
Salaries expenses………………………… 48,000
Other expenses…………………………… 75,000
Net income………………………………….. 24,000

Click here for the solution: Selected balances from a company's financial statements are shown below

(Softech Canvas Goods) Comparative balance sheets for Softech Canvas Goods for 2011 and 2010 are shown below

E 18-24 Profitability ratio

Comparative balance sheets for Softech Canvas Goods for 2011 and 2010 are shown below. Softech pays no dividends, and instead reinvests all earnings for future growth.

Comparative Balance sheets ($in 000s)
December 31
2011 2010
Assets:
Cash $ 50 $40
Accounts receivable 100 120
Short-term investment 50 40
Inventory 200 140
Property, plant, and equipment (net) 600 550
$1,000 $890
Liabilities and Shareholder’s Equity:
Current liabilities $240 $210
Bonds payable 160 160
Paid-in Capital 400 400
Retained earnings 200 120
$1,000 $890

Required:
1. Determine the return on shareholders' equity for 2011.
2. What does the ratio measure?

Click here for the solution: Comparative balance sheets for Softech Canvas Goods for 2011 and 2010 are shown below

Shown below in T-account format are the changes affecting the retained earnings of Brenner-Jude Corporation during 2011

E 18-18 Transactions affecting retained earnings

Shown below in T-account format are the changes affecting the retained earnings of Brenner-Jude Corporation during 2011. At January 1, 2011, the corporation had outstanding 105 million common shares, $1 par per share.

Retained Earnings ($ in millions)
90 Beginning balance
Retirement of 5 million common
Shares for $22 million 2
88 Net income for the year
Declaration and payment of a
$0.33 per share cash dividend 33

Declaration and distribution
Of a 4% stock dividend 20
123 ending balance

Required:
1. From the information provided by the account changes you should be able to recreate the transactions that affected Brenner-Jude’s retained earnings during 2011. Prepare the journal entries that Brenner-Jude must have recorded during the year for these transactions.
2. Prepare a statement of retained earnings for Brenner-Jude for the year ended 2011.

Click here for the solution: Shown below in T-account format are the changes affecting the retained earnings of Brenner-Jude Corporation during 2011

Use the financial data shown below to calculate the following ratios for the current year

Use the financial data shown below to calculate the following ratios for the current year:

(a) Current ratio.
(b) Acid-test ratio.
(c) Accounts receivable turnover.
(d) Days' sales uncollected.
(e) Inventory turnover.
(f) Days' sales in inventory.

Income statement data
Sales (all on credit)……………………………………………….. $650,000
Cost of goods sold…………………………………………………. 425,000
Income before taxes……………………………………………. 78,000
Net Income…………………………………………………………… 54,000

Ending Beginning
Balances Balances
Cash…………………………………………………………….. $ 19,500 $ 15,000
Accounts receivable (net)………………………….. 65,000 60,000
Inventory…………………………………………………… 71,500 64,500
Plant and equipment (net) ………………………… 195,000 183,900
Total assets………………………………………………… $351,000 $323,400

Current liabilities…………………………………………. $ 62,400 $ 52,700
Long-term notes payable ……………………………. 97,500 100,000

Click here for the solution: Use the financial data shown below to calculate the following ratios for the current year

An analysis of the transactions made by S. Moses & Co., a certified public accounting firm, for the month of August is shown below

ACC 557 Week 1 Assignment

E1-8 An analysis of the transactions made by S. Moses & Co., a certified public accounting firm, for the month of August is shown below. Each increase and decrease in stockholders’ equity is explained.

Cash Accounts Office Accounts Stockholders’ _ Receivable _ Supplies _ Equipment _ Payable _ Equity
1. _$15,000 _$15,000 Investment
2. _2,000 _$5,000 _$3,000
3. _750 _$750
4. _4,600 _$3,700 _8,300 Service Revenue
5. _1,500 _1,500
6. _2,000 _2,000 Dividends
7. _650 −650 Rent Expense
8. _450 _450
9. _4,900 _4,900 Salaries Expense
10. _500 −500 Utilities Expense

Instructions
(a) Describe each transaction that occurred for the month.
(b) Determine how much stockholders’ equity increased for the month.
(c) Compute the amount of net income for the month.

Click here for the solution: An analysis of the transactions made by S. Moses & Co., a certified public accounting firm, for the month of August is shown below

A tabular analysis of the transactions made during August 2012 by Nigel Company during its first month of operations is shown below

E3-4 A tabular analysis of the transactions made during August 2012 by Nigel Company during its first month of operations is shown below. Each increase and decrease in stockholders’ equity is explained.

Instructions
(a) Describe each transaction.
(b) Determine how much stockholders’ equity increased for the month.
(c) Compute the net income for the month.

Click here for the solution: A tabular analysis of the transactions made during August 2012 by Nigel Company during its first month of operations is shown below

A partial statement of financial position of Century University is shown below

P19-3: Various Funds-University

A partial statement of financial position of Century University is shown below.

Century University
Partial Statement of Financial Position
June 30, 2007
Assets
Current Funds
Unrestricted
Cash $210,000
Accounts Receivable (less allowance for doubtful accounts, $9,000) 341,000
State Appropriations Receivable 75,000
Total Unrestricted 626,000
Restricted
Cash 7,000
Investments 60,000
Total Restricted 67,000
Total Current $693,000
Liabilities and Fund Balances
Current Funds
Unrestricted
Accounts Payable $ 45,000
Deferred Revenues 66,000
Fund Balance 515,000
Total Unrestricted 626,000
Restricted
Fund Balance 67,000
Total Restricted 67,000
Total Current $693,000

During the fiscal year ended June 30, 2008, the following transactions occurred:

1. A gift of $100,000 was received from an alumnus on July 7, 2007. One-half of the gift was to be used for the purchase of books for the university’s library and the rest was to be used to establish a scholarship fund per the alumnus’s request. It was also requested that the income generated by the scholarship fund be awarded annually as a scholarship for a qualified disadvantaged student. The board decided that the funds for the new scholarship should be invested in savings certificates on July 20, 2007. These savings certificates were puchased on July 21, 2007.
2. Revenue for the fiscal period from student tuition and fees amounted to $1,900,000. During the fiscal year, $1,686,000 of this amount was collected; $66,000 had been collected in the prior year. The university had also received $158,000 by June 30, 2008, for fees for the session beginning July 1, 2008.
3. During the year ended June 30, 2008, the university collected $349,000 of the outstanding accounts receivable at the beginning of the year. The balance was determined to be uncollectible and was written off against the allowance account. At June 30, 2008, the allowance account was increased by $3,000.
4. Because of late student fee payments, $6,000 in interest charges were earned and collected.
5. The state appropriation was received. Another unrestricted appropriation of $50,000 was made by the state. This had not been paid to the university by the fiscal year-end.
6. An unrestricted gift of $25,000 cash was received from alumni of the university.
7. During the year, investments of $21,000 were sold for $26,000. Investment income amounting to $1,900 was received.
8. Unrestricted operating expenses were recorded at $1,777,000, $59,000 of which remains unpaid.
9. Restricted current funds of $13,000 were spent for authorized purposes during the year.
10. The accounts payable at June 30, 2007, were paid during the year.
11. During the year, $7,000 interest was earned and received on the savings certificates purchased in accordance with the board’s resolution [in item (1)].

Required:
A. Prepare journal entries to record in summary form the transactions above for the year ended June 30, 2008. Each journal entry should be numbered to correspond with the transaction described above. Set up the following headings:
B. Prepare a statement of activities for the year ended June 30, 2008.
C. Prepare a statement of activities for the current funds for the year ended June 30, 2008. Include more details about the revenues and expenses.

Click here for the solution: A partial statement of financial position of Century University is shown below

The three accounts shown below appear in the general ledger of Cesar Corp. during 2008

ACC 560 Week 9 Assignment

E13-6 The three accounts shown below appear in the general ledger of Cesar Corp. during 2008.

Equipment
Date Debit Credit Balance
Jan. 1 Balance 160,000
July 31 Purchase of equipment 70,000 230,000
Sept. 2 Cost of equipment constructed 53,000 283,000
Nov. 10 Cost of equipment sold 49,000 234,000

Accumulated Depreciation-Equipment
Date Debit Credit Balance
Jan. 1 Balance 71,000
Nov. 10 Accumulated depreciation on equipment sold 30,000 41,000
Dec. 31 Depreciation for year 28,000 69,000

Retained Earnings
Date Debit Credit Balance
Jan. 1 Balance 105,000
Aug. 23 Dividends (cash) 14,000 91,000
Dec. 31 Net income 67,000 158,000

Instructions
From the postings in the accounts, indicate how the information is reported on a statement of cash flows using the indirect method. The loss on sale of equipment was $5,000. (Hint: Cost of equipment constructed is reported in the investing activities section as a decrease in cash of $53,000.)


Click here for the solution: The three accounts shown below appear in the general ledger of Cesar Corp. during 2008

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

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

The shareholders' equity of WBL Industries includes the items shown below

E 18-10 Effect of cumulative, nonparticipating preferred stock on dividends—3 years

The shareholders' equity of WBL Industries includes the items shown below. The board of directors of WBL declared cash dividends of $8 million, $20 million, and $150 million in its first three years of operation—2011, 2012, and 2013, respectively.

Common stock 100
Paid in capital excess of par, common 980
Preferred stock, 8% 200
Paid in capital excess of par, preferred 555

Required:
Determine the amount of dividends to be paid to preferred and common shareholders in each of the three years, assuming that the preferred stock is cumulative and nonparticipating.


Click here for the solution: The shareholders' equity of WBL Industries includes the items shown below

The comparative balance sheet of Flack Inc for December 31, 2013 and 2012 is shown as follows

PR 16-1A The comparative balance sheet of Flack Inc for December 31, 2013 and 2012 is shown as follows:

Assets:
Dec 31, 2013 Dec 2012
Cash $234,660 $219,720
Accounts receivables 85,440 78,360
Inventories 240,660 231,420
Investments 0 90,000
Land 123,000 0
Equipment 264,420 207,420
Accumulated Depreciation-Equipment (62,400) (55,500)
885,780 771,420

Liabilities and Stockholders’ Equity
Accounts payable (merchandise creditor) 159,180 151,860
Accrued expenses payable (operations expenses) 15,840 19,740
Dividends payable 9,000 7,200
Common stock $1 par 48,000 36,000
Paid in capital excess of par-common stock 180,000 105,000
Retained earnings 473,760 451,620
885,780 771,420

The following additional information was taken from the records:
a. The investments were sold for $105,000 cash.
b. Equipment and land were acquired for cash.
c. There was no disposal of equipment during the year.
d. Common stock was issued for cash.
e. There was a $58,140 credit to retained earnings for net income.
f. There was a $36,000 debit to retained earnings for cash dividends declared.

Instructions
Prepare a statement of cash flows using the indirect method of presenting cash flows from operating activities


Click here for the solution: The comparative balance sheet of Flack Inc for December 31, 2013 and 2012 is shown as follows

The income statement of Rodriquez Company is shown below

E23-3 (Preparation of Operating Activities Section - Indirect Method, Periodic Inventory) The income statement of Rodriquez Company is shown below.

RODRIQUEZ COMPANY
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2012

Sales $6,900,000
Cost of goods sold
Beginning inventory $1,900,000
Purchases $4,400,000
Goods available for sale $6,300,000
Ending inventory $1,600,000
Cost of goods sold $4,700,000
Gross profit $2,200,000
Operating expenses
Selling expenses $450,000
Administrative expenses $700,000 $1,150,000
Net income $1,050,000

Additional information:
1. Accounts receivable decreased $310,000 during the year.
2. Prepaid expenses increase $170,000 during the year.
3. Accounts payable to suppliers of merchandise decreased $275,000 during the year.
4. Accrued expenses payable decreased $120,000 during the year.
5. Administrative expenses include depreciation expense of $60,000.

Instructions
Prepare the operating activities section of the statement of cash flows for the year ended December 31, 2012, for Rodriquez Company, using the indirect method.

Click here for the solution: The income statement of Rodriquez Company is shown below

Epson, Inc., has the common stock accounts shown here

A4. (Accounting for a stock dividend) Epson, Inc., has the common stock accounts shown here. The stock has a $38 per share market value. If Epson pays a 10% stock dividend, show the revised common stock accounts.
Paid-in capital ($0.50 par value, 10,000,000 shares) $ 5,000,000
Capital contributed in excess of par value 13,000,000
Retained earnings 60,000,000
Common stockholders’ equity $78,000,000

Click here for the solution: Epson, Inc., has the common stock accounts shown here

The net changes in the balance sheet accounts of Barney Corporation for the year 2010 are shown below

The net changes in the balance sheet accounts of Barney Corporation for the year 2010 are shown below.

Account Debit Credit
Cash $ 82,000
Short-term investments $121,000
Accounts receivable 83,200
Allowance for doubtful accounts 13,300
Inventory 74,200
Prepaid expenses 17,800
Investment in subsidiary (equity method) 20,000
Plant and equipment 210,000
Accumulated depreciation 130,000
Accounts payable 80,700
Accrued liabilities 21,500
Deferred tax liability 15,500
8% serial bonds 80,000
Common stock, $10 par 90,000
Additional paid-in capital 150,000
Retained earnings—Appropriation for
bonded indebtedness 60,000
Retained earnings—Unappropriated 38,000
$643,600 $643,600

An analysis of the Retained Earnings—Unappropriated account follows:
Retained earnings unappropriated, December 31, 2009 $1,300,000
Add: Net income 327,000
Transfer from appropriation for bonded indebtedness 60,000
Total $1,687,000
Deduct: Cash dividends $185,000
Stock dividend 240,000 425,000
Retained earnings unappropriated, December 31, 2010 $1,262,000

1. On January 2, 2010 short-term investments (classified as available-for-sale) costing $121,000 were sold for $155,000.
2. The company paid a cash dividend on February 1, 2010.
3. Accounts receivable of $16,200 and $19,400 were considered uncollectible and written off in 2010 and 2009, respectively.
4. Major repairs of $33,000 to the equipment were debited to the Accumulated Depreciation account during the year. No assets were retired during 2010.
5. The wholly owned subsidiary reported a net loss for the year of $20,000. The loss was recorded by the parent.
6. At January 1, 2010, the cash balance was $166,000.

Instructions
Prepare a statement of cash flows (indirect method) for the year ended December 31, 2010. Barney Corporation has no securities which are classified as cash equivalents.

Click here for the solution: The net changes in the balance sheet accounts of Barney Corporation for the year 2010 are shown below

The yields for Treasuries with differing maturities on a recent day were as shown in the table on page 253

E6–2 The yields for Treasuries with differing maturities on a recent day were as shown in the table on page 253.

a. Use the information to plot a yield curve for this date.
b. If the expectations hypothesis is true, approximately what rate of return do investors expect a 5-year Treasury note to pay 5 years from now?
c. If the expectations hypothesis is true, approximately (ignoring compounding) what rate of return do investors expect a 1-year Treasury security to pay starting 2 years from now?
d. Is it possible that even though the yield curve slopes up in this problem, investors do not expect rising interest rates? Explain.

Click here for the solution: The yields for Treasuries with differing maturities on a recent day were as shown in the table on page 253

The yields for Treasuries with differing maturities, including an estimate of the real rate of interest, on a recent day were as shown in the following table

E6–3 The yields for Treasuries with differing maturities, including an estimate of the real rate of interest, on a recent day were as shown in the following table:

Maturity Yield Real rate of interest
3 months 1.41% 0.80%
6 months 1.71 0.80
2 years 2.68 0.80
3 years 3.01 0.80
5 years 3.70 0.80
10 years 4.51 0.80
30 years 5.25 0.80

Use the information in the preceding table to calculate the inflation expectation for each maturity.

Click here for the solution: The yields for Treasuries with differing maturities, including an estimate of the real rate of interest, on a recent day were as shown in the following table

Final earnings estimates for Chilean Health Spa & Fitness Center have been prepared for the CFO of the company and are shown in the following table

(Dividend policies) Final earnings estimates for Chilean Health Spa & Fitness Center have been prepared for the CFO of the company and are shown in the following table. The firm has 7,500,000 shares of common stock outstanding. As assistant to the CFO, you are asked to determine the yearly dividend per share to be paid depending on the following possible policies:

YEAR PROFITS AFTER TAXES
1 $ 18,000,000
2 21,000,000
3 19,000,000
4 23,000,000
5 25,000,000

a. A stable dollar dividend targeted at 40 percent of earnings over a 5-year period
b. A small, regular dividend of $0.60 per share plus a year-end extra when the profits in any year exceed $20,000,000. The year-end extra dividend will equal 50 percent of profits exceeding $20,000,000.
c. A constant dividend payout ratio of 40 percent

Click here for the solution: Final earnings estimates for Chilean Health Spa & Fitness Center have been prepared for the CFO of the company and are shown in the following table