Chapter 9 Exercise 31. Liquidity ratios. Edison, Stagg, and Thor.docx

Chapter 9 Exercise 3
1. Liquidity ratios. Edison, Stagg, and Thornton have the
following financial information at the close of business on July
10:
Edison
Stagg
Thornton
Cash
$4,000
$2,500
$1,000
Short-Term Investments
3,000
2,500
2,000
Accounts Receivable
2,000
2,500
3,000
Inventory
1,000
2,500
4,000
Prepaid Expenses
800
800
800
Accounts Payable
200
200
200
Notes Payable: Short-Term
3,100

3,100
3,100
Accrued Payables
300
300
300
Long-Term Liabilities
3,800
3,800
3,800
a. Compute the current and quick ratios for each of the three
companies. (Round calculations to two decimal places.) Which
firm is the most liquid? Why?
b. Suppose Thornton is using FIFO for inventory valuation and
Edison is using LIFO. Comment on the comparability of
information between these two companies.
c. If all short-term notes payable are due on July 11 at 8 a.m.,
comment on each company's ability to settle its obligation in a
timely manner.
Chapter 9 Exercise 4
1. Computation and evaluation of activity ratios. The following
data relate to Alaska Products Inc.:
20X5
20X4
Net Credit Sales
$832,000
$760,000
Cost of Goods Sold
440,000
350,000
Cash, Dec. 31
125,000
110,000
Accounts Receivable, Dec. 31
180,000

140,000
Inventory, Dec. 31
70,000
50,000
Accounts Payable, Dec. 31
115,000
108,000
2. The company is planning to borrow $300,000 via a 90-day
bank loan to cover short-term operating needs.
a. Compute the accounts-receivable and inventory-turnover
ratios for 20X5. Alaska rounds all calculations to two decimal
places.
b. Study the ratios from part (a) and comment on the company's
ability to repay a bank loan in 90 days.
c. Suppose that Alaska's major line of business involves the
processing and distribution of fresh and frozen fish throughout
the United States. Do you have any concerns about the
company's inventory-turnover ratio? Briefly discuss.
Chapter 9 Problem 1
1. Horizontal and vertical analysis. The following financial
statements pertain to Waterloo Corporation:
WATERLOO CORPORATION
Comparative Balance Sheets
December 31,20X5 and 20X4
20X5
20X4
Assets
Current Assets
Cash
$ 11,250
$ 12,500
Accounts Receivable (net)
18,500
25,000
Inventories

38,500
35,000
Prepaid Expense
__3,750
__3,750
Total Current Assets
$ 72,000
$ 76,250
Property, Plant, and Equipment
Buildings (net)
$ 102,750
$ 101,250
Equipment (net)
28,500
30,000
Vehicles (net)
32,000
40,000
Total Property, Plant, and Equipment
$ 163,250
$ 171,250
Trademarks (net)
__$ 14,750
__$ 2,500
Total assets
$ 250,000
$ 250,000
Liabilities and Stockholders' Equity
Current Liabilities
Accounts Payable
$ 49,000
$ 70,000
Notes Payable
13,500
40,000
Federal Taxes Payable

__2,500
__25,000
Total Current Liabilities
$ 65,000
$ 135,000
Long-Term Debt
__$ 50,000
__$ 25,000
Total Liabilities
$ 115,000
$ 160,000
Stockholders' Equity
Common Stock, $10 par
$ 25,000
$ 25,000
Retained Earnings
__110,000
__65,000
Total Stockholders' Equity
$ 135,000
$ 90,000
Total Liabilities and Stockholders' Equity
$ 250,000
$ 250,000
WATERLOO CORPORATION
Comparative Income Statements
For the Years Ending December 31, 20X5 and 20X4
20X5
20X4
Net Sales
$ 550,000
$500,000
Cost of Goods Sold
__330,000

__250,000
Gross Profit
$ 220,000
$250,000
Operating Expense
__132,500
__100,000
Income Before Interest and Taxes
$ 87,500
$150,000
Interest Expense
__12,500
__3,000
Income Before Taxes
$ 75,000
$147,000
Income Tax Expense
__30,000
__58,800
Net Income
$ 45,000
$ 88,200
Instructions
a. Prepare a horizontal analysis of the balance sheet, showing
dollar and percentage changes. Round all calculations in parts
(a) and (b) to two decimal places.
b. Prepare a vertical analysis of the income statement by
relating each item to net sales.
c. Briefly comment on the results of your analysis.
Chapter 9 Problem 2
2. Ratio computation. The financial statements of the Lone Pine
Company follow.
LONE PINE COMPANY
Comparative Balance Sheets
December 31, 20X2 and 20X1 ($000 Omitted)

20X2
20X1
Assets
Current Assets
Cash and Short-Term Investments
$ 400
$ 600
Accounts Receivable (net)
3,000
2,400
Inventories
__2,000
__2,200
Total Current Assets
$5,400
$5,200
Land
$1,700
$ 600
Buildings and Equipment (net)
__1,500
__1,000
Total Property, Plant, and Equipment
$3,200
$1,600
Total Assets
$8,600
$6,800
Current Liabilities
Accounts Payable
$1,800
$1,700
Notes Payable
__1,100

__1,900
Total Current Liabilities
$2,900
$3,600
Long-Term Liabilities
Bonds Payable
4,100
2,100
Total Liabilities
$7,000
$5,700
Common Stock
$ 200
$ 200
Retained Earnings
__1,400
__900
Total Stockholders' Equity
$1,600
$1,100
$8,600
$6,800
LONE PINE COMPANY
Statement of Income and Retained Earnings
For the Year Ending December 31,20X2 ($000 Omitted)
Net Sales*
$36,000
Less: Cost of Goods Sold
$20,000
Selling Expense
6,000

Administrative Expense
4,000
Interest Expense
400
Income Tax Expense
__2,000
_32,400
Net Income
$ 3,600
Retained Earnings, Jan. 1
___900
$ 4,500
Cash Dividends Declared and Paid
__3,100
Retained Earnings, Dec. 31
$ 1,400
*All sales are on account.
Instructions
Compute the following items for Lone Pine Company for 20X2,
rounding all calculations to two decimal places when necessary:
a. Quick ratio
b. Current ratio
c. Inventory-turnover ratio
d. Accounts-receivable-turnover ratio
e. Return-on-assets ratio
f. Net-profit-margin ratio
g. Return-on-common-stockholders' equity
h. Debt-to-total assets
i. Number of times that interest is earned
j. Dividend payout rate

Chapter 9 Problem 3
3. Financial statement construction via ratios. Incomplete
financial statements of Lock Box Inc. are presented as follows:
LOCK BOX INC.
Income Statement
For the Year Ending December 31, 20X3
Sales
$ ?
Cost of Goods Sold
?
Gross Profit
$ 15,000,000
Operating Expenses and Interest
?
Income Before Taxes
$ ?
Income taxes, 40%
?
Net income
$ ?
LOCK BOX INC.
Balance Sheet
December 31, 20X3
Assets
Cash
$ ?
Accounts Receivable
?

Inventory
?
___8,000,000
Total assets
$ 24,000,000
Accounts Payable
$ ?
Notes Payable: Short-Term
600,000
Bonds Payable
4,600,000
Common Stock
2,000,000
Retained Earnings
?
$ 24,000,000
Further information is the following:
· Cost of goods sold is 60% of sales. All sales are on account.
· The company's beginning inventory is $5 million; inventory-
turnover ratio is 4.
· The debt-to-total-assets ratio is 70%.

· The profit margin on sales is 6%.
· The firm's accounts-receivable-turnover ratio is 5. Receivables
increased by $400,000 during the year.
Instructions
Using the preceding data, complete the income statement and
the balance sheet.
Running Head: PROJECT PERFORMANCE 1
PROJECT PERFORMANCE 9
Assignment 3: Project Performance
Craig A. Alford
BUS 419 – Project Estimating and Budgeting
Strayer University
Dr. Shah Jamali
Spring quarter of 2015
Introduction
This project is about the development of an improved
version of Microsoft Windows 10 Enterprise Client. The new
product is meant to offer better-improved service to clients and
to ensure that their computing experience is smooth and secure.
The project has been initiated to come up with a better
functioning operating system. From the project title, one can
identify that the software under development is the second
version with different patches being applied to the initial
software to improve it. There is need for extensive research to

be done on the new product under development so that the
issues experienced in the first version are not experienced in the
current version under development and that users can get a
better experience from the new version as compared to the
previous.
Key Objectives
This project is geared towards the development of a better
version of the Microsoft Windows with secure implementations
among other patches being developed. The need for this is to
come up with a more usable operating system with more
features incorporated within it. The product undergoing
development is required to support integration with other
operating systems to allow for a wider access with other
systems and software for increased functionality. Users of the
system will also receive patches and updates on previous
software for increased functionality and better security as
compared to peer operating systems. The aim of this is to strive
to come up with a better functioning operating system with
integration enabled for a smoother experience and increased
usability and productivity.
Projected Costs
Within the project, there are some projected costs during
different stages of the project development phase. For
successful implementation of the project, there are a number of
costs to be experienced through its lifecycle. Costs are such as
staffing costs, research, purchase of software and equipment to
carry out testing and development among other costs, which are
bound to arise within the project.
Resource
Cost
Research
$1,500
Staffing
$45,000
Certification

$1,200
Testing
$3,000
Acquisition of Software Components
$1,500
Purchase of Computers
$15,500
Purchase of Software for Testing
$950
Licensing Fees
$800
Testing Environment
$1,000
Totals
$70,450
Resources
During the project phases, there are a number of resources,
which need to be set aside for the success and completion of the
project. The different departments and teams
1. Human Resources
The human resources required for the implementation of this
project vary since there is need for multiple teams to be brought
together to ensure that the requirements are met. The first team
is the team doing the initial research on the project. Secondly,
there is need for the project planning team. There is also need
for the human resources team to be involved in the process. In
addition, after the human resources team has selected members
of the project, there is need for creation of sub-teams within the
project for delivery of objectives and accomplishment of tasks.
2. Computers
In accomplishment of this project, computers loaded with the
appropriate software are necessary for purchase and
implementation. The programmers need computers, which
provide them with an environment where they can be able to
perform adequate testing on the new platform being, developed

to ensure that it meets customer needs and requirements.
3. Finances
In order for the project to reach completion, there are a number
of financial implications, which have to be incurred. There is
need to set and draft a budget for the project implementation.
The budget should be inclusive of costs such as staffing costs,
costs of purchasing
4. Time
There is need for a time schedule to be outlined for the project.
The project timeline needs to be developed by the project
manager and then communicated to the team members, project
sponsors and stakeholders so that they can know the expected
period of wait from start to completion. In addition, this helps
in planning for different aspects of a project to allow for
successful implementation and development.
Responsibility Assignment Matrix
The responsibility assessment matrix is a form of a linear
responsibility chart developed for purposes of description of
participation by various roles as per the tasks they are carrying
out or the expected deliverables of the project from them. This
is a useful tool to implement for information clarity in a multi-
functional department project. The most commonly used
responsibilities in this matrix are Responsible (R), Accountable
(A), Consulted (C) and Informed (I). The responsible party is
one whose work is to achieve the task; the accountable party is
the one answerable, the consulted is one whose opinions are
sought and the informed is one who is kept up to date with the
progress of the project (Doglione, 2016).
Name
Project Sponsor
Project Manager
System Coder
System Analyst
System Tester
Human Resources
Initiate Project

I
R
R
I
I
R
Research
I
R
C
C
C
R
Staffing
C
R
I
I
I
R
System Development
I
I
R
R
R
I
System Testing
I
I
R
R
R
I
System Packaging and Deployment
I

I
R
R
R
I
Critical Path Analysis
Definition of Software Requirements
There is need for definition of the minimum operational
and usage requirements for the project. The need for this is that
it acts as a quality control measure where a system needs to
meet certain criteria before installation or usage. The
specification of requirements is an important aspect so that the
team responsible can be aware of what developments are to be
made to the system and software.
Requirement Project Plan
The requirements for the project to be completed
successfully need to be defined and outlined properly so that the
project manager and the respective teams can be able to plan for
the project appropriately.
Software Integration
The software in development needs to be integrated within
other software for increased productivity. Integration testing
needs to be carried out
Software Testing and Quality Assurance
The software needs to undergo testing to ensure
requirements are met and that the new operating system
developed is bug free and usable. There is need for different
forms of testing to be applied on the new software to ensure that
all components are functional. The first test will involve the
installation procedures to be analyzed whether they are working
as they should and whether after installation, all required
components are successfully installed and are functional. In
addition, there is need for a functionality test to see whether the
new operating system will be operational fully and whether all
components work smoothly without interruptions.

There is need for a security test to be run on the new
operating system to ensure that is it robust and secure form
attacks. A good operating system should be secure from virus
and Trojan attacks, network attacks, backdoors and brute force
among other types on computer operating systems. The system
needs to have a smart screen integrated within it to ensure that
new software is tested and checked for validity before
installation. The user needs to receive a prompt to give them
details of the software, confirm whether they want to continue
with installation as well as warn them about the potential harm,
which could be caused by use of the software.
The system should also have secure authorization and
authentication options to have increased security. The system
should prompt for a password to be set during installation since
most users tend to forget to set up passwords on further
computer use until they experience an attack on their system. In
addition, there is need for the software to be bundled with an in
built firewall as a measure for protection from intrusion and
other attacks.
The system also needs to undergo a compatibility test to
ensure that the system can be able to function with other
additional software from different vendors to allow different
users to be able to have their needs met. Different software and
utility packages offer different users’ different needs met
therefor the need for compatibility testing.
Software Accreditation
This is the process of validation that a software has met all
requirements and can be released for use. The software can only
be validated if all the checks for quality assurance are passed
and that the software meets the minimum user requirements and
needs.
Patches and Updates
There is need for periodic patches and updates to be
released and configured to be downloaded automatically to
allow the system to be up to date and also protected from
different types of attacks which might develop over time. Also,

patches to software help in fixing possible bugs and other errors
in system software, which may not manifest or be detected in
the initial testing phases.
Documentation
It is important for a software to be tested and documented
so that there can be ease f troubleshooting. This is the role of
the developers of the system. A troubleshooting manual is easy
to develop form the system documentation since there is
outlining of all possible issues encountered and those projected
to encounter during development and implementation as well as
steps of development, which can be used to guide the user on
what steps to take to manage issues and repair problems with
functionality of an operating system. Failure to document can
lead to major issues in troubleshooting since this would require
the system to be analyzed anew, which would be tasking and
time consuming. In addition, documentation of a project is good
practice, which needs to be followed especially in an
information technology project.
Total Float in the Project
The free float in project management refers to the total
amount of time by which an activity can be delayed without the
early start of the successor activity being delayed. This is
achievable through the early finish date of each activity within
the project being subtracted from the early start date of the next
activity in the project. The total float is the total amount of time
that an activity can be delayed from when it is started and the
end date of the project is not delayed. The total slack refers to
the total amount of time within a schedule where a task can be
delayed before the completion of the entire project is delayed.
There is need to identify the free slack and float times within a
project for purposes of planning so that the project manager and
members can be able to cater for any events that might lead to a
project being delayed (Rouse, 2017).
Measures for Critical Path Management and Float Reduction
The critical path is a method in project management where
there is identification of activities that are critical to the

project. It makes use of an approach to scheduling where the
project is broken down into a number of work tasks and they are
displayed in a flow chart then there is calculation of the
duration
Best practices for minimization are to calculate the
shortest paths of processes. In addition, it is important for
calculation of early starts and end dates so that slack and float
can be accounted for and this can allow for better panning of
activities within a project. A project needs to have free float
and slack so that there is an allowance for flexibility in the
event one or more tasks are slightly delayed and others are
finished early. It is better for a project to be delivered before
time as opposed to it being delivered after the deadline since
there is an increase in costs and the budget might get
overstretched.
References
Doglione, Cara (July 25, 2016). Understanding Responsibility
Assignment Matrix (RACI
Matrix). Retrieved from: https://project-
management.com/understanding-responsibility-
assignment-matrix-raci-matrix/
Rouse, Margaret (2017). Float (Project Float, Slack).

Retrieved from:
http://whatis.techtarget.com/definition/float-project-float-
slack
1. Assignment 4: Earned Value Management (EVM)
Due Week 8 and worth 130 points
Use the Internet or the Strayer Library to research articles on
EVM.
Project managers often use Earned Value Management (EVM) if
they want to compare the status of their projects to their project
plans. Using the same project from Assignment 3, develop a
project scenario to explain the amount of work that you have
completed with the funds allotted.
This assignment consists of two (2) sections:
· MS Project Exercise
· EVM paper
You must submit both sections as separate files for the
completion of this assignment. Label each file name according
to the section of the assignment for which it is written.
Additionally, you may create and / or assume all necessary
assumptions needed for the completion of this assignment.
Section 1: MS Project Exercise
Assume that your project is using more resources (e.g., time,
money, and / or other non-labor resources, etc.) than anticipated
through 50% of the project duration.
1. Update the project schedule to reflect related resource
changes.
2. Produce a series of EVM reports from MS project that
illustrates your project’s performance. Note: Your reports
should focus on the cost and schedule performance of the
project.
Section 2: EVM Paper
Write a two to three (2-3) page paper in which you:
3. Summarize the resource changes of your project, and discuss
the performance results of your project.

4. Determine one (1) performance measurement baseline for
your MS Project. Justify your response.
5. Apply earned value analysis (EVA) in order to forecast future
cost issues. Justify your response.
Your assignment must follow these formatting requirements:
· Typed, double spaced, using Times New Roman font (size 12),
with one-inch margins on all sides; citations and references
must follow APA or school-specific format. Check with your
professor for any additional instructions.
· Include a cover page containing the title of the assignment, the
student’s name, the professor’s name, the course title, and the
date. The cover page and the reference page are not included in
the required assignment page length.
The specific course learning outcomes associated with this
assignment are:
· Appraise the process of determining the cost and relevant
budget required for a project component.
· Analyze quality assurance processes in project management.
· Use technology and information resources to research issues in
project estimating and budgeting.
· Write clearly and concisely about project estimating and
budgeting using proper writing mechanics.
Grading for this assignment will be based on answer quality,
logic / organization of the paper, and language and writing
skills, using the following rubric found here.
Student Guidance ReportAshford University ACC205Guidance
ReportWeek FiveLISTEN TO AUDIO/VIDEO EXPLAINING
THE GUIDANCE REPORTYELLOW INDICATES ACCOUNT
AMOUNTS CHANGEDChange Account to:Based Upon Course
Start DateAccount to
be changedOriginal
AmountJan - FebMar-AprMay-JunJul-AugSept-OctNov-DecCh 9
Ex 3Edison Cash
$4,0005,0006,0007,0008,0009,00010,000Stagg Cash

$2,5003,5004,5005,5006,5007,5008,500Thornton Cash
$1,0002,0003,0004,0005,0006,0007,000QuestionsYOUR
ANSWERS BASED UPON COURSE START DATECompute the
current and quick ratios for each of the three companies. (Round
calculations to two decimal places.) Which firm is the most
liquid? Why?Edison Current ratioQuick ratioStagg Current
ratioQuick ratioThorntonCurrent ratioQuick ratioSuppose
Thornton is using FIFO for inventory valuation and Edison is
using LIFO. Comment on the comparability of information
between these two companies.If all short-term notes payable are
due on July 11 at 8 a.m., comment on each company's ability to
settle its obligation in a timely manner.Account to
be changedOriginal
Ex 420X5 20X420X5 20X420X5 20X420X5 20X420X5
20X420X5 20X420X5 20X4 Net Credit Sales
$832,000760000.00842,000760,000852,000760,000862,000760,
000872,000760,000882,000760,000892,000760,000 Net
Credit Sales $832,000$760,000 Cost of Goods Sold
440,000350000.00450,000350,000460,000350,000470,000350,0
00480,000350,000490,000350,000500,000350,000 Cost of
Goods Sold 440,000350,000QuestionsYOUR ANSWERS
BASED UPON COURSE START DATE The company is
planning to borrow $300,000 via a 90-day bank loan to cover
short-term operating needs.a. Compute the accounts-receivable
and inventory-turnover ratios for 20X5Accounts Receivable
TurnoverInventory TurnoverStudy the ratios from part (a) and
comment on the company's ability to repay a bank loan in 90
days.Suppose that Alaska's major line of business involves the
processing and distribution of fresh and frozen fish throughout
the United States. Do you have any concerns about the
company's inventory-turnover ratio? Briefly discuss.Account to
be changedOriginal
Pb 120X5 20X420X5 20X420X5 20X420X5 20X420X5
20X420X5 20X420X5 20X4AssetsCurrent AssetsPLACE YOUR

ANSWERS BELOW STARTING ON ROW 99Cash
1125012500.00$12,250$13,400$13,250$14,30021,50027,700$15
,250$16,100$16,250$17,000$17,250$17,900 Accounts
Receivable (net)
1850025000.0019,50025,90020,50026,80041,50037,70022,5002
8,60023,50029,50024,50030,400 Inventories
3850035000.0039,50035,90040,50036,8006,7506,45042,50038,6
0043,50039,50044,50040,400 Prepaid Expense
37503750.004,7504,6505,7505,550$75,000$78,9507,7507,3508,
7508,2509,7509,150 Total Current Assets
7200076250.00$73,000$77,150$74,000$78,050$105,750$103,95
0$76,000$79,850$77,000$80,750$78,000$81,650 Buildings
(net)
102750101250.00$103,750$102,150$104,750$103,05031,50032,
700$106,750$104,850$107,750$105,750$108,750$106,650
Equipment (net)
2850030000.0029,50030,90030,50031,80035,00042,70032,5003
3,60033,50034,50034,50035,400 Vehicles (net)
3200040000.0033,00040,90034,00041,800$166,250$173,95036,
00043,60037,00044,50038,00045,400 Total Property, Plant,
and Equipment
163250171250.00$164,250$172,150$165,250$173,050$17,750$
5,200$167,250$174,850$168,250$175,750$169,250$176,650
Trademarks (net)
147502500.00$15,750$3,400$16,750$4,300$253,000$252,700$1
8,750$6,100$19,750$7,000$20,750$7,900 Total assets
250000250000.00$251,000$250,900$252,000$251,800$52,000$
72,700$254,000$253,600$255,000$254,500$256,000$255,400
Accounts Payable
4900070000.00$50,000$70,900$51,000$71,80016,50042,700$53
,000$73,600$54,000$74,500$55,000$75,400 Notes Payable
1350040000.0014,50040,90015,50041,8005,50027,70017,50043,
60018,50044,50019,50045,400 Federal Taxes Payable
250025000.003,50025,9004,50026,800$68,000$137,7006,50028,
6007,50029,5008,50030,400 Total Current Liabilities
65000135000.00$66,000$135,900$67,000$136,800$53,000$27,7

00$69,000$138,600$70,000$139,500$71,000$140,400Long-
Term Debt
5000025000.00$51,000$25,900$52,000$26,800$118,000$162,70
0$54,000$28,600$55,000$29,500$56,000$30,400 Total
Liabilities
115000160000.00$116,000$160,900$117,000$161,800$28,000$
27,700$119,000$163,600$120,000$164,500$121,000$165,400
Common Stock, $10 par
2500025000.00$26,000$25,900$27,000$26,800113,00067,700$2
9,000$28,600$30,000$29,500$31,000$30,400 Retained
Earnings
11000065000.00111,00065,900112,00066,800$138,000$92,7001
14,00068,600115,00069,500116,00070,400 Total
13500090000.00$136,000$90,900$137,000$91,800$253,000$25
2,700$139,000$93,600$140,000$94,500$141,000$95,400
250000250000.00$251,000$250,900$252,000$251,800258,0002
58,000$254,000$253,600$255,000$254,500$256,000$255,400W
ATERLOO CORPORATIONComparative Income StatementsFor
the Years Ending December 31, 20X5 and 20X420X5
20X420X520X420X5 20X420X520X420X5
20X420X520X420X5 20X4Net Sales
550000500000.00575,000510,000580,000520,000585,000521,00
0590,000523,000595,000525,000600,000535,000 Prepare a
horizontal analysis of the balance sheet showing percentage
changes from 20X4 to 20X5. Round all calculations in parts (a)
and (b) to two decimal places.QuestionsYOUR ANSWERS
BASED UPON COURSE START DATEWATERLOO
CORPORATIONComparative Balance SheetsDecember 31,20X5
and 20X4AssetsCurrent Assets% ChangeCash Accounts
Receivable (net) Inventories Prepaid Expense Total
Current Assets Buildings (net) Equipment (net) Vehicles
(net) Total Property, Plant, and Equipment Trademarks (net)
Total assets Accounts Payable Notes Payable Federal Taxes
Payable Total Current Liabilities Long-Term Debt Total

Liabilities Common Stock, $10 par Retained Earnings
Total Stockholders' Equity Total Liabilities and
Stockholders' Equity WATERLOO
CORPORATIONComparative Income Statements Prepare a
vertical analysis of the 20X5 income statement by relating each
item to net sales.20X5 Net Sales Cost of Goods Sold Gross
Profit Operating Expense Income Before Interest and Taxes
Interest Expense Income Before Taxes Income Tax Expense Net
Income Account to
be changedOriginal
Pb 2LONE PINE COMPANYComparative Balance
SheetsDecember 31, 20X2 and 20X1 ($000 Omitted)20X2
20X120X2 20X120X2 20X120X2 20X120X2 20X120X2
20X120X2 20X1AssetsCurrent AssetsPLACE YOUR
ANSWERS BELOW STARTING ON ROW 176 Cash and Short-
Term Investments
400600.001,4001,4002,4002,2003,4003,0004,4003,8005,4004,6
006,4005,400 Accounts Receivable (net)
30002400.004,0003,2005,0004,0006,0004,8007,0005,6008,0006
,4009,0007,200 Inventories
20002200.004,0003,0004,0003,8005,0004,6006,0005,4007,0006
,2008,0007,000 Total Current Assets
54005200.009,4007,60011,40010,00014,40012,40017,40014,800
20,40017,20023,40019,600 Land
1700600.002,7001,4003,7002,2004,7003,0005,7003,8006,7004,
6007,7005,400 Buildings and Equipment (net)
15001000.002,5001,8003,5002,6004,5003,4005,5004,2006,5005
,0007,5005,800 Total Property, Plant, and Equipment
32001600.005,2003,2007,2004,8009,2006,40011,2008,00013,20
09,60015,20011,200Total Assets
86006800.0014,60010,80018,60014,80023,60018,80028,60022,8
0033,60026,80038,60030,800 Accounts Payable
18001700.002,8002,5003,8003,3004,8004,1005,8004,9006,8005
,7007,8006,500 Notes Payable
11001900.002,1002,7003,1003,5004,1004,3005,1005,1006,1005

,9007,1006,700 Total Current Liabilities
29003600.003,9004,4004,9005,2005,9006,0006,9006,8007,9007
,6008,9008,400 Bonds Payable
41002100.005,1002,9006,1003,7007,1004,5008,1005,3009,1006
,10010,1006,900 Total Liabilities
70005700.009,0007,30011,0008,90013,00010,50015,00012,1001
7,00013,70019,00015,300 Common Stock Par value $1 (Par
value not in original problem, but needed to calculate ratio -
dividend payout
rate)200200.001,2001,0002,2001,8003,2002,6004,2003,4005,20
04,2006,2005,000Number of
Shares200200.001,2001,0002,2001,8003,2002,6004,2003,4005,2
004,2006,2005,000 Retained Earnings
1400900.004,4002,5005,4004,1007,4005,7009,4007,30011,4008
,90013,40010,500 Total Stockholders' Equity
16001100.005,6003,5007,6005,90010,6008,30013,60010,70016,
60013,10019,60015,500 Total Liabilities and Stockholders'
Equity
86006800.0014,60010,80018,60014,80023,60018,80028,60022,8
0033,60026,80038,60030,800LONE PINE COMPANYStatement
of Income and Retained EarningsFor the Year Ending December
31,20X2 ($000 Omitted)Net Sales*
3600039,00041,00045,00046,00049,00055,000QuestionsYOUR
ANSWERS BASED UPON COURSE START DATECompute the
following items for Lone Pine Company for 20X2, rounding all
calculations to two decimal places and do nt insert a percent
symbol. Quick ratio Current ratio Inventory-turnover ratio
Accounts-receivable-turnover ratio Return-on-assets ratio
Net-profit-margin ratio Return-on-common-stockholders'
equity Debt-to-total assets Number of times that interest is
earned Dividend payout rateAccount to
be changedOriginal
Pb 3Cost of goods sold % of
sales60.0%60.1%60.2%60.3%60.4%60.5%60.6%QuestionsYOU
R ANSWERS BASED UPON COURSE START DATELOCK

BOX INC.Income StatementFor the Year Ending December 31,
20X3Sales Cost of Goods Sold Gross Profit Operating Expenses
and Interest Income Before Taxes Income taxes, 40% Net
income LOCK BOX INC.Balance SheetDecember 31,
20X3AssetsCash Accounts Receivable Inventory Property,
Plant, and Equipment Total assets Liabilities and Stockholders'
Equity Accounts Payable Notes Payable: Short-Term Bonds
Payable Common Stock Retained Earnings Total Liabilities
and Stockholders' Equity
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