1 FI 3300 - CORPORATION FINANCE Take-Home Problem Set One (THPS-1) Spring 2016 Directions: This problem set covers chapter 2 (Accounting Review) in the textbook and basic math skills that you will use throughout this course. Determine or compute an answer for each question/problem. After you have computed an answer for every question, enter your answers online via the “quiz” function entitled “THPS 1 ANSWER SUBMISSION FORM.” See course calendar for due date and for chat session dates during which I will answer questions about the THPS and/or provide hints for how to solve certain problems. This is a take-home, open book, open notes financial statement analysis problem set. Work on this Assignment is to be yours alone - any discussion of either the questions on the assignment or your answers with anyone other than your instructor will be considered as cheating and, thus, as a violation of the GSU honor code. _____________________________________________________________ Financial statement data for Delicious Dishes, Inc. are given below. All figures are in dollars. Use this data to construct an Income Statement for the year ending December 31, 2015 and use your constructed statement to answer the following 4 questions. 1. What was gross profit from income statement for the year ending December 31, 2015? 2. What was operating profit (i.e., EBIT) from Delicious Dishes income statement for the year ending December 31, 2015? 3. What was profit before taxes (i.e., EBT) from Delicious Dishes income statement for the year ending December 31, 2015? 4. What was net income from Delicious Dishes income statement for the year ending December 31, 2015? 5. On December 10, 2015, Jennings, Inc. paid out total dividends of $450,000 (this was the only dividend payment made during the year). If Jennings reported Retained earnings of $2,168,000 for 2014 and Retained earnings of $2,380,000 for 2015, what was Jennings reported net income in 2015? 6. In 2015, Variman, Incorporated had Gross Accounts receivable of $36,200 and management estimated the Allowance for Doubtful accounts to be $2,500. Compute the ratio of Allowance of Doubtful accounts to Net Accounts receivable for Variman, Inc. for 2015 (that is, compute Allowance/Net Accounts receivable – record your answer as a percent rounded to one decimal place; for example, record 0.234567 as 23.5%). Advertising 384,000 Beginning of year inventory 1,243,000 Depreciation 350,000 End of year inventory 1,128,000 General and administrative expenses 1,184,000 Gross sales 28,242,000 Interest expense 150,000 Lease payments 148,000 Management salaries 4,253,000 Purchases 18,243,000 Research and development 324,000 Returns and allowances 564,000 Taxes 925,000 2 7. In 2015, the Whaddock Company purchased 1,560,000 units from its supplier at a cost of $250.00 per unit. Whaddock sold 1,525,000 u ...

1. 1
FI 3300 - CORPORATION FINANCE
Take-Home Problem Set One (THPS-1)
Spring 2016
Directions: This problem set covers chapter 2 (Accounting
Review) in the textbook and basic math skills that you
will use throughout this course. Determine or compute an
answer for each question/problem. After you have
computed an answer for every question, enter your answers
online via the “quiz” function entitled “THPS 1
ANSWER SUBMISSION FORM.” See course calendar for due
date and for chat session dates during which I
will answer questions about the THPS and/or provide hints for
how to solve certain problems.
This is a take-home, open book, open notes financial statement
analysis problem set. Work on this Assignment
is to be yours alone - any discussion of either the questions on
the assignment or your answers with anyone
other than your instructor will be considered as cheating and,
thus, as a violation of the GSU honor code.

2. _____________________________________________________
________
Financial statement data for Delicious Dishes, Inc. are given
below. All figures are in dollars. Use this data to
construct an Income Statement for the year ending December
31, 2015 and use your constructed statement to
answer the following 4 questions.
1. What was gross profit from income statement for the year
ending December 31, 2015?
2. What was operating profit (i.e., EBIT) from Delicious Dishes
income statement for the year ending
December 31, 2015?
3. What was profit before taxes (i.e., EBT) from Delicious
Dishes income statement for the year ending
December 31, 2015?
4. What was net income from Delicious Dishes income
statement for the year ending December 31, 2015?
5. On December 10, 2015, Jennings, Inc. paid out total
dividends of $450,000 (this was the only dividend
payment made during the year). If Jennings reported Retained
earnings of $2,168,000 for 2014 and Retained
earnings of $2,380,000 for 2015, what was Jennings reported
net income in 2015?
6. In 2015, Variman, Incorporated had Gross Accounts

3. receivable of $36,200 and management estimated the
Allowance for Doubtful accounts to be $2,500. Compute the
ratio of Allowance of Doubtful accounts to Net
Accounts receivable for Variman, Inc. for 2015 (that is,
compute Allowance/Net Accounts receivable – record
your answer as a percent rounded to one decimal place; for
example, record 0.234567 as 23.5%).
Advertising 384,000
Beginning of year inventory 1,243,000
Depreciation 350,000
End of year inventory 1,128,000
General and administrative expenses 1,184,000
Gross sales 28,242,000
Interest expense 150,000
Lease payments 148,000
Management salaries 4,253,000
Purchases 18,243,000
Research and development 324,000
Returns and allowances 564,000
Taxes 925,000

4. 2
7. In 2015, the Whaddock Company purchased 1,560,000 units
from its supplier at a cost of $250.00 per unit.
Whaddock sold 1,525,000 units of its product in 2015 at a price
of $330.00 per unit. Whaddock began 2015
with 425,000 units in inventory (inventory is carried at a cost of
$250.00 per unit). Using this information,
compute Whaddock’s gross profit for 2015.
8. Referring back to the previous question, compute
Whaddock’s 2015 ending inventory balance in dollars
(valued at cost per unit of $250.00).
9. In 2015, Timmers, Inc. (a retail clothing company) sold
222,000 units of its product at an average price of
$50.00 per unit. The company reported estimated returns and
allowances in 2015 of 2.0 percent of gross
revenue. Timmers actually purchased 210,000 units of its
product from its manufacturer in 2015 at an average
cost of $30.00 per unit. Timmers began 2015 with 20,000 units
of its product in inventory (carried at an
average cost of $30.00 per unit). Operating expenses (excluding
depreciation) for Timmers, Inc. in 2015 were
$1,250,000 and depreciation expense was $250,000. Timmers
had $4,500,000 in debt outstanding throughout

5. all of 2015. This debt carried an average interest rate of 8.0
percent. Finally, Timmers’ tax rate was 40 percent.
Timmers’ fiscal year runs from January 1 through December 31.
Given this information, compute net income
for Timmers for 2015.
10. Referring back to the previous problem, compute Timmers’
ending inventory balance for 2015 (that is, what
did Timmers report as inventory on its December 31, 2015
balance sheet).
Financial data for Jade’s Jeans are given below. All figures are
in dollars. Use this data to construct a Balance
Sheet for the company for the year ending December 31, 2015
and use your constructed statement to answer the
following 5 questions (i.e., 11 through 15). NOTE: Not every
item in the list below belongs on the balance sheet
– you have to use some given data to determine needed accounts
for the balance sheet. However, other than what
is listed and/or can be derived, there are no other accounts on
Jade’s balance sheet - use cash as a plug figure to
balance the balance sheet.
11. What did Jade’s Jeans record as Total Current Assets on
December 31, 2015 balance sheet?
12. What did Jade’s Jeans record as Total Current Liabilities on

6. December 31, 2015 balance sheet?
13. What did Jade’s Jeans record as Total Assets on December
31, 2015 balance sheet?
Accounts payable 855,000
Accruals 294,600
Accumulated depreciation 12,795,300
Additional paid in capital 18,476,200
Beginning of year inventory 9,476,100
Common stock ($1.50 par value) 16,200,000
Cost of goods sold 71,359,800
Current portion of Long-term debt 2,475,600
Gross accounts receivable 1,875,600
Gross fixed assets 64,185,200
Long-term debt (excluding current portion) 23,148,600
Purchases 75,384,700
Retained earnings 9,017,600
Returns and allowances 12,600
Short-term bank loan 466,000
Cash ???

7. 3
14. What was Total Shareholder’s Equity on Jade’s Jeans
December 31, 2015 balance sheet?
15. Jade’s Jeans Company reported net income for 2015 of
$871,800 and the company paid dividends of $0.06
per share in 2015. Given this information (along with the data
provided above), compute what Jade’s Jeans
Company reported as retained earnings on its December 31,
2014 balance sheet? (Assume that no additional
shares of stock were issued between December 31, 2014 and
December 31, 2015).
16. The year-end 2014 balance sheet for Brad’s Copy, Inc. lists
common stock ($1.25 par value) at $7,626,000
capital surplus at $86,543,126 and retained earnings at
$218,546,280. On the 2012 year-end balance sheet,
retained earnings is listed as $214,368,900. The firm’s net
income in 2014 was $12,050,120. No stock was
issued or repurchased in 2014. What were dividends per share
paid by the firm in 2014 (rounded to the nearest
cent)?
17. The Lunder Company has total assets of $21,542,000,
current liabilities of $2,547,000, and long-term
liabilities of $7,410,000. The firm has 1,000,000 shares of

8. common stock outstanding. Compute the firm’s
book value per share.
18. Referring back to the previous question, if Lunder’s net
income equals $1,600,000 and Lunder has a P/E ratio
of 15.0 (note that P/E ratio = stock price per share divided by
earnings per share), what is the current price of
the stock?
USE THE FOLLOWING INFORMATION TO ANSWER
QUESTIONS 19 - 22
The Devlin Corporation, a diversified distribution company,
purchases cartons of canned tennis balls from the
Questor Company and markets the balls under the Devlin brand
name. Devlin started operations on January 1,
2015. In the table below, Quarter 1 represents the time period
from January 1, 2015 to March 31, 2015 and Quarter
2 represents the time period from April 1, 2015 to June 30,
2015. Devlin began operations on January 1, 2015
with no inventory.
Purchases and sales data for Devlin's first two quarters of
business are shown below:
Quarter 1
Sales 23,000 cartons at $50 per carton
Purchases January 9,000 cartons at $25

9. February 10,000 cartons at $30
March 12,000 cartons at $35
Quarter 2
Sales 55,000 cartons at $65 per carton
Purchases April 14,000 cartons at $40
May 16,000 cartons at $45
June 20,000 cartons at $50
19. Calculate the Quarter 2 ending inventories (in dollars) using
the LIFO inventory valuation method.
20. Calculate Quarter 2 GROSS PROFIT using the LIFO
inventory valuation method.
21. Calculate the Quarter 2 ending inventories (in dollars) using
the FIFO inventory valuation method.
22. Calculate Quarter 2 GROSS PROFIT using the FIFO
inventory valuation method.
4

10. For each of the algebra problems below, round your answer to 2
decimal places and record your answer on D2L
without (if applicable) a comma. Thus, enter 3.24765 as 3.25 or
.18763 as 0.19 or 3,214.842876 as 3214.85.
23. Suppose that A = D + E and that D/A = 0.45. Solve for A/E.
24. Suppose that A = D + E and that D/A = 0.60. Solve for D/E.
25. Suppose that D + E = A, that N/A = .15 and that D/A = 0.75.
Solve for N/E.
26. Suppose that S/A = 4.5 and N/S = .08. Solve for N/A.
27. Suppose A – D = E, that N = 20,000, E/A = .75 and N/E =
.40. Compute D/A.
28. Assume that S/A = 6.5, D/A = .40, N/E = .75 and A = D + E.
Solve for N/S.
29. Given that: 2y + 10x + 18 = 4 and 4x – y + 11 = 0, solve for
x.
30. Referring back to the prior problem, what is y?
31. Given that: 4(3g + 104) - 90 = 504 + 6(g - 14), solve for g.
32. Bill can mow his mother's lawn in 40 minutes. His brother
Jim can mow it in 65 minutes. How long will it
take them to do it together, if each has his own lawnmower?
(Record your answer in minutes rounded to one
decimal place. For example, if the answer you find is 14.2835
minutes, record 14.3).
33. On a particular day, the campus bookstore sold 30 T-shirts.
White ones cost $9.95 and yellow ones cost
$10.50. Total sales of T-shits were $310.60. How many white
shirts were sold?

11. 34. Referring back to the prior problem, how many yellow shirts
were sold?
35. If working alone, Marcus can paint a room in 3.15 hours.
Working together with Claudia, they can both
paint the room in 2.09 hours. How long would it take Claudia
working alone to paint the room?
36. An airplane leaves Louisville for Cleveland at a speed of
475 mph. Twenty minutes later; a plane heading
for Louisville leaves Cleveland, which is 350 miles from
Louisville at a speed of 500 mph. When they meet,
how far are they from Cleveland?
37. The weight of a bag of bricks plus 20% of its weight is 30
pounds. How much does the bag of bricks weigh,
in pounds?
38. A rich merchant had collected many gold coins. He did not
want anybody to know about them. One day, his
wife asked, "How many gold coins do you have?" After pausing
a moment, he replied, "Well! If I divide the
coins into two unequal numbers, then 25 times the difference
between the two numbers equals the difference
between the squares of the two numbers." How many gold coins
does the rich merchant have?
39. Suppose that you go out and buy 100 lbs. of cucumbers that
are 99% water. Unfortunately, you do not observe
the rules of caring for your cucumbers so after some time they
dehydrate until they are only 98% water. How

12. much do they then weigh?
40. Ed invests $57,000 in stocks paying 8%. How much
additional money should he invest in certificates of
deposit paying 3% so that the average return on Ed’s
investments is 4%?
Critical Analysis & Discussions Rubric
On-Time Posting
On Time
Late 1 Day
Late 2 Days
Late 3 Days
No Posting
Critical Analysis #1
10 points
Posted first critical analysis of another student's Case Study
before 11:59PM Eastern Time Thursday.
7 points
Posted first critical analysis of another student's Case Study
before 11:59PM Eastern Time Friday.
4 points
Posted first critical analysis of another student's Case Study
before 11:59PM Eastern Time Saturday.
2 points
Posted first critical analysis of another student's Case Study
before 11:59PM Eastern Time Sunday.
0 points
Did not post first critical analysis of another student's Case
Study before 11:59PM Eastern Time Sunday.
Critical Analysis #2
10 points
Posted Critical Analysis of a second student's Case Study before
11:59PM Eastern Time Thursday.
7 points

13. Posted Critical Analysis of a second student's Case Study before
11:59PM Eastern Time Friday.
4 points
Posted Critical Analysis of a second student's Case Study before
11:59PM Eastern Time Saturday.
2 points
Posted a critical analysis of a second student's Case Study
before 11:59PM Eastern Time Sunday.
0 points
Did not post a Critical Analysis of a second student's Case
Study before 11:59PM Eastern Time Sunday.
Quality of Critical Analyses
Excellent
Good
Acceptable
Needs Significant Improvement
No Posting
Quality of Critical Analysis #1
20 points
Posted a clear, concise, and thorough critical analysis of another
student's Case Study (3 or more points of analysis).
17 points
Posted a complete and coherent critical analysis of another
student's Case Study (2 or more points of analysis).
14 points
Posted a critical analysis of another student's Case Study.
Addresses at least one of the major points of discussion.
4 points
Posted a minimal response to another student's Case Study. The
response did not provide a critical analysis of the Case Study.
0 points
Did not post a critical analysis of another student's Case Study.
Quality of Critical Analysis #2
20 points
Posted a clear, concise, and thorough critical analysis of a
second student's Case Study (3 or more points of analysis).

14. 17 points
Posted a mostly complete and coherent response to the initial
discussion topic. Addresses the major points of discussion, but
misses minor points.
14 points
Posted a critical analysis of a second student's Case Study.
Addresses at least one of the major points of discussion.
4 points
Posted a minimal response to a second student's Case Study.
The response did not provide a critical analysis of the Case
Study.
0 points
Did not post a critical analysis of a second student's Case Study.
References for Critical Analyses
Excellent
Acceptable
Needs Significant Improvement
No References
References in Critical Analysis #1
5 points
Includes 3 or more scholarly / authoritative sources of
information in the response and correctly cites each reference
using in-text citations and a reference list.
3 points
Includes 2 or more scholarly / authoritative sources of
information but sources were improperly cited. Citations and/or
references provide sufficient information to locate and retrieve
the resource.
2 points
Sources were mentioned but the citations and/or references did
not provide sufficient information to locate or retrieve the
resource. OR, the sources used were not authoritative.
0 points
Does not include in-text citations and references.

15. References in Critical Analysis #2
5 points
Includes 3 or more scholarly / authoritative sources of
information in the response and correctly cites each reference
using in-text citations and a reference list.
3 points
Includes 2 or more scholarly / authoritative sources of
information but sources were improperly cited. Citations and/or
references provide sufficient information to locate and retrieve
the resource.
2 points
Sources were mentioned but the citations and/or references did
not provide sufficient information to locate or retrieve the
resource. OR, the sources used were not authoritative.
0 points
Does not include in-text citations and references.
Timing of Comments in Critical Analysis Threads
On Time
Late Comments
No Response
Comments in First Critical Analysis Thread
5 points
Completed posting comments to another student's critical
analysis before 11:59PM Eastern Time Sunday.
0 points
Completed posting comments to another student's critical
analysis after 11:59PM Eastern Time Sunday.
0 points
Does not post comments in a critical analysis thread.
Comments in Second Critical Analysis Thread
5 points

16. Completed posting comments to a second student's critical
analysis before 11:59PM Eastern Time Sunday.
0 points
Completed posting comments to another student's critical
analysis after 11:59PM Eastern Time Sunday.
0 points
Does not post comments in a second critical analysis thread.
Quality of Comments to Critical Analyses
Excellent
Acceptable
Minimal
No Response
Comments in First Critical Analysis Thread
10 points
Posted a complete and coherent response to a fellow student's
critical analysis. Fully addresses the student's work and adds
value to the discussion.
7.5 points
Posted a coherent response to a fellow student's critical
analysis. Addresses the student's points and adds some value to
the discussion.
5 points
Responds to a fellow student, but adds little or no value to the
discussion
0 points
Does not respond to another student.
Comments in Second Critical Analysis Thread
10 points
Posted a complete and coherent response to a fellow student's
critical analysis in a second thread (different from the first).
Fully addresses the student's work and adds value to the
discussion.

17. 7.5 points
Posted a coherent response to a fellow student's critical analysis
(in a second critical analysis thread). Addresses the student's
points and adds some value to the discussion.
5 points
Responds to a fellow student, but adds little or no value to the
discussion.
0 points
Does not respond to another student.
I need critical analysis for this also. And You should make a
half page comment on this case study (not a comment on your
own critical analysis I mean comment on this case study itself)
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