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O.B Meat Products generated Php 216,460 in gross sales in 2021. After deducting Php 148,500 in costs of goods sold and Php 29,139 in operating expenses, the company reported a net income from operations of Php 38,821. Additional other income of Php 10,000 resulted in a total net income of Php 48,821 for the year. As of December 31, 2021, the company had total assets of Php 455,233 consisting of cash, no inventory, and net worth of Php 406,412 plus net income.
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Problem 14-4AFinancial information for Ernie Bishop Company is pre.docx
Problem 14-4A
Financial information for Ernie Bishop Company is presented below.
ERNIE BISHOP COMPANY
Balance Sheets
December 31
Assets
2013
2012
Cash
$ 70,000
$ 65,000
Short-term investments
52,000
40,000
Receivables (net)
98,000
80,000
Inventory
125,000
135,000
Prepaid expenses
29,000
23,000
Land
130,000
130,000
Building and equipment (net)
168,000
175,000
$672,000
$648,000
Liabilities and Stockholders’ Equity
Notes payable
$100,000
100,000
Accounts payable
48,000
42,000
Accrued liabilities
44,000
40,000
Bonds payable, due 2016
150,000
150,000
Common stock, $10 par
200,000
200,000
Retained earnings
130,000
116,000
$672,000
$648,000
ERNIE BISHOP COMPANY
Income Statement
For the Years Ended December 31
2013
2012
Net sales
$858,000
$798,000
Cost of goods sold
611,000
575,000
Gross profit
247,000
223,000
Operating expenses
204,500
181,000
Net income
$ 42,500
$ 42,000
Additional information:
1.
Inventory at the beginning of 2012 was $118,000.
2.
Total assets at the beginning of 2012 were $632,000.
3.
No common stock transactions occurred during 2012 or 2013.
4.
All sales were on account.
5.
Receivables (net) at the beginning of 2012 were $88,000.
(a)
Indicate, by using ratios, the change in liquidity and profitability of Ernie Bishop Company from 2012 to 2013.
(Round Earnings per share to 2 decimal places, e.g. 1.65, and all others to 1 decimal place, e.g. 6.8 or 6.8% .)
2012
2013
Change
LIQUIDITY
Current
Acid-test
Receivables turnover
Inventory turnover
PROFITABILITY
Profit margin
Asset turnover
Return on assets
Earnings per share
$
(b)
Given below are three independent situations and a ratio that may be affected. For each situation, compute the affected ratio (1) as of December 31, 2013, and (2) as of December 31, 2014, after giving effect to the situation. Net income for 2014 was $50,000. Total assets on December 31, 2014, were $700,000.
Situation
Ratio
(1)
18,000 shares of common stock were sold at par on July 1, 2014.
Return on common stockholders’ equity
(2)
All of the notes payable were paid in 2014. The only change in liabilities was that the notes payable were paid.
Debt to total assets
(3)
Market price of common stock was $9 on December 31, 2013, and $12.50 on December 31, 2014.
Price-earnings ratio
2013
2014
Change
Return on common stockholders’ equity
Debt to total assets
Price-earnings ratio
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Problems Problem 14-4AFinancial information for Ernie Bisho.docx
Problems:
Problem 14-4A
Financial information for Ernie Bishop Company is presented below.
ERNIE BISHOP COMPANY
Balance Sheets
December 31
Assets
2013
2012
Cash
$ 137,900
$ 128,050
Short-term investments
102,440
78,800
Receivables (net)
193,060
157,600
Inventory
246,250
265,950
Prepaid expenses
57,130
45,310
Land
256,100
256,100
Building and equipment (net)
330,960
344,750
$1,323,840
$1,276,560
Liabilities and Stockholders’ Equity
Notes payable
$197,000
197,000
Accounts payable
94,560
82,740
Accrued liabilities
86,680
78,800
Bonds payable, due 2016
295,500
295,500
Common stock, $10 par
394,000
394,000
Retained earnings
256,100
228,520
$1,323,840
$1,276,560
ERNIE BISHOP COMPANY
Income Statement
For the Years Ended December 31
2013
2012
Net sales
$1,690,260
$1,572,060
Cost of goods sold
1,203,670
1,132,750
Gross profit
486,590
439,310
Operating expenses
402,865
356,570
Net income
$ 83,725
$ 82,740
Additional information:
1.
Inventory at the beginning of 2012 was $232,460.
2.
Total assets at the beginning of 2012 were $1,245,040.
3.
No common stock transactions occurred during 2012 or 2013.
4.
All sales were on account.
5.
Receivables (net) at the beginning of 2012 were $173,360.
(a) Indicate, by using ratios, the change in liquidity and profitability of Ernie Bishop Company from 2012 to 2013. (Round Earnings per share to 2 decimal places, e.g. 1.65, and all others to 1 decimal place, e.g. 6.8 or 6.8% .)
2012
2013
Change
LIQUIDITY
Current
:1
:1
Acid-test
:1
:1
Receivables turnover
times
times
Inventory turnover
times
times
PROFITABILITY
Profit margin
%
%
Asset turnover
times
times
Return on assets
%
%
Earnings per share
$
$
(b) Given below are three independent situations and a ratio that may be affected. For each situation, compute the affected ratio (1) as of December 31, 2013, and (2) as of December 31, 2014, after giving effect to the situation. Net income for 2014 was $98,500. Total assets on December 31, 2014, were $1,379,000.
Situation
Ratio
(1)
35,460 shares of common stock were sold at par on July 1, 2014.
Return on common stockholders’ equity
(2)
All of the notes payable were paid in 2014. The only change in liabilities was that the notes payable were paid.
Debt to total assets
(3)
Market price of common stock was $18 on December 31, 2013, and $24.63 on December 31, 2014.
Price-earnings ratio
2013
2014
Change
Return on common stockholders’ equity
%
%
Debt to total assets
%
%
Price-earnings ratio
times
times
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Problem 14-6A
The comparative statements of Beulah Company are presented below.
BEULAH COMPANY
Income Statement
For the Years Ended December 31
2014
2013
Net sales (all on account)
$501,000
...
akuntansi_keuangan_menengah_1_latihan_4.pptx
Pernyataan gabungan memiliki keuntungan tidak membutuhkan pembentukan sebuah laporan keuangan baru. Namun, Menutup laba bersih sebagai subtotal pada pernyataan ini dianggap merugikan
The following are the financial statements for Nederland Consumer .docx
The following are the financial statements for Nederland Consumer Products Company for the fiscal year ended September 30, 2011.
Nederland Consumer Products Company
Income Statement for the Fiscal Year
Ended September 30, 2011
Net sales
$
62,141
Cost of goods sold
26,906
Gross margin
$
35,235
Marketing, research, administrative exp.
15,715
Depreciation
776
Operating income(loss)
$
18,744
Interest expense
499
Earnings(loss) before income taxes
$
18,245
Income taxes
5,623
Net earnings(loss)
$
12,622
Nederland Consumer Products Company
Balance Sheet as of September 30, 2011
Assets:
Liabilities and Stockholder's Equity:
Cash and marketable securities
$
6,807
Accounts payable
$
2,776
Investment securities
353
Accrued and other liabilities
7,780
Accounts receivable
3,288
Taxes payable
2,047
Total inventories
5,376
Debt due within one year
7,490
Deferred income taxes
882
Prepaid expenses & other receivables
1,991
Total current assets
$
18,697
Total current liabilities
$
20,093
Property, plant, and equip., at cost
30,215
Long-term debt
12,217
Less: Accumulated depreciation
9,653
Deferred income taxes
2,543
Net plant and equipment
$
20,562
Other non-current liabilities
3,504
Net goodwill & other intangible assets
23,970
Total liabilities
$
38,357
Other non-current assets
1,622
Convertible Class A preferred stock
1,696
Common stock
1,608
Retained earnings
23,190
Total stockholders’ equity (deficit)
$
26,494
Total assets
$
64,851
Total liabilities and stockholders’ equity
$
64,851
Calculate all the ratios, for which industry figures are available below, for Nederland and compare the firm’s ratios with the industry ratios.
(Round current ratio, quick ratio, debt ratio, long term debt ratio answers to 2 decimal places, e.g. 12.25 and other answers to 1 decimal place, e.g.12.5 or 12.5%.)
Industry Average
Current Ratio
2.05
[removed]
times
Quick Ratio
0.78
[removed]
times
Gross margin
23.9
%
[removed]
%
Net profit margin
12.3
%
[removed]
%
Debt ratio
0.23
[removed]
times
Long-term debt to equity
0.98
[removed]
times
Interest coverage
5.62
[removed]
ROA
5.3
%
[removed]
%
ROE
18.8
%
[removed]
%
.
Black Ink Cashflow Secrets Your Accountant Never Shared
Tom Shay's presentation on how to accurately predict the cash position of a business for a 12 month time period. www.profitsplus.org
Recommended
Problem 14-4AFinancial information for Ernie Bishop Company is pre.docx
Problem 14-4A
Financial information for Ernie Bishop Company is presented below.
ERNIE BISHOP COMPANY
Balance Sheets
December 31
Assets
2013
2012
Cash
$ 70,000
$ 65,000
Short-term investments
52,000
40,000
Receivables (net)
98,000
80,000
Inventory
125,000
135,000
Prepaid expenses
29,000
23,000
Land
130,000
130,000
Building and equipment (net)
168,000
175,000
$672,000
$648,000
Liabilities and Stockholders’ Equity
Notes payable
$100,000
100,000
Accounts payable
48,000
42,000
Accrued liabilities
44,000
40,000
Bonds payable, due 2016
150,000
150,000
Common stock, $10 par
200,000
200,000
Retained earnings
130,000
116,000
$672,000
$648,000
ERNIE BISHOP COMPANY
Income Statement
For the Years Ended December 31
2013
2012
Net sales
$858,000
$798,000
Cost of goods sold
611,000
575,000
Gross profit
247,000
223,000
Operating expenses
204,500
181,000
Net income
$ 42,500
$ 42,000
Additional information:
1.
Inventory at the beginning of 2012 was $118,000.
2.
Total assets at the beginning of 2012 were $632,000.
3.
No common stock transactions occurred during 2012 or 2013.
4.
All sales were on account.
5.
Receivables (net) at the beginning of 2012 were $88,000.
(a)
Indicate, by using ratios, the change in liquidity and profitability of Ernie Bishop Company from 2012 to 2013.
(Round Earnings per share to 2 decimal places, e.g. 1.65, and all others to 1 decimal place, e.g. 6.8 or 6.8% .)
2012
2013
Change
LIQUIDITY
Current
Acid-test
Receivables turnover
Inventory turnover
PROFITABILITY
Profit margin
Asset turnover
Return on assets
Earnings per share
$
(b)
Given below are three independent situations and a ratio that may be affected. For each situation, compute the affected ratio (1) as of December 31, 2013, and (2) as of December 31, 2014, after giving effect to the situation. Net income for 2014 was $50,000. Total assets on December 31, 2014, were $700,000.
Situation
Ratio
(1)
18,000 shares of common stock were sold at par on July 1, 2014.
Return on common stockholders’ equity
(2)
All of the notes payable were paid in 2014. The only change in liabilities was that the notes payable were paid.
Debt to total assets
(3)
Market price of common stock was $9 on December 31, 2013, and $12.50 on December 31, 2014.
Price-earnings ratio
2013
2014
Change
Return on common stockholders’ equity
Debt to total assets
Price-earnings ratio
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Problems Problem 14-4AFinancial information for Ernie Bisho.docx
Problems:
Problem 14-4A
Financial information for Ernie Bishop Company is presented below.
ERNIE BISHOP COMPANY
Balance Sheets
December 31
Assets
2013
2012
Cash
$ 137,900
$ 128,050
Short-term investments
102,440
78,800
Receivables (net)
193,060
157,600
Inventory
246,250
265,950
Prepaid expenses
57,130
45,310
Land
256,100
256,100
Building and equipment (net)
330,960
344,750
$1,323,840
$1,276,560
Liabilities and Stockholders’ Equity
Notes payable
$197,000
197,000
Accounts payable
94,560
82,740
Accrued liabilities
86,680
78,800
Bonds payable, due 2016
295,500
295,500
Common stock, $10 par
394,000
394,000
Retained earnings
256,100
228,520
$1,323,840
$1,276,560
ERNIE BISHOP COMPANY
Income Statement
For the Years Ended December 31
2013
2012
Net sales
$1,690,260
$1,572,060
Cost of goods sold
1,203,670
1,132,750
Gross profit
486,590
439,310
Operating expenses
402,865
356,570
Net income
$ 83,725
$ 82,740
Additional information:
1.
Inventory at the beginning of 2012 was $232,460.
2.
Total assets at the beginning of 2012 were $1,245,040.
3.
No common stock transactions occurred during 2012 or 2013.
4.
All sales were on account.
5.
Receivables (net) at the beginning of 2012 were $173,360.
(a) Indicate, by using ratios, the change in liquidity and profitability of Ernie Bishop Company from 2012 to 2013. (Round Earnings per share to 2 decimal places, e.g. 1.65, and all others to 1 decimal place, e.g. 6.8 or 6.8% .)
2012
2013
Change
LIQUIDITY
Current
:1
:1
Acid-test
:1
:1
Receivables turnover
times
times
Inventory turnover
times
times
PROFITABILITY
Profit margin
%
%
Asset turnover
times
times
Return on assets
%
%
Earnings per share
$
$
(b) Given below are three independent situations and a ratio that may be affected. For each situation, compute the affected ratio (1) as of December 31, 2013, and (2) as of December 31, 2014, after giving effect to the situation. Net income for 2014 was $98,500. Total assets on December 31, 2014, were $1,379,000.
Situation
Ratio
(1)
35,460 shares of common stock were sold at par on July 1, 2014.
Return on common stockholders’ equity
(2)
All of the notes payable were paid in 2014. The only change in liabilities was that the notes payable were paid.
Debt to total assets
(3)
Market price of common stock was $18 on December 31, 2013, and $24.63 on December 31, 2014.
Price-earnings ratio
2013
2014
Change
Return on common stockholders’ equity
%
%
Debt to total assets
%
%
Price-earnings ratio
times
times
Warning
Don't show me this message again for the assignment
Ok
Cancel
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Problem 14-6A
The comparative statements of Beulah Company are presented below.
BEULAH COMPANY
Income Statement
For the Years Ended December 31
2014
2013
Net sales (all on account)
$501,000
...
akuntansi_keuangan_menengah_1_latihan_4.pptx
Pernyataan gabungan memiliki keuntungan tidak membutuhkan pembentukan sebuah laporan keuangan baru. Namun, Menutup laba bersih sebagai subtotal pada pernyataan ini dianggap merugikan
The following are the financial statements for Nederland Consumer .docx
The following are the financial statements for Nederland Consumer Products Company for the fiscal year ended September 30, 2011.
Nederland Consumer Products Company
Income Statement for the Fiscal Year
Ended September 30, 2011
Net sales
$
62,141
Cost of goods sold
26,906
Gross margin
$
35,235
Marketing, research, administrative exp.
15,715
Depreciation
776
Operating income(loss)
$
18,744
Interest expense
499
Earnings(loss) before income taxes
$
18,245
Income taxes
5,623
Net earnings(loss)
$
12,622
Nederland Consumer Products Company
Balance Sheet as of September 30, 2011
Assets:
Liabilities and Stockholder's Equity:
Cash and marketable securities
$
6,807
Accounts payable
$
2,776
Investment securities
353
Accrued and other liabilities
7,780
Accounts receivable
3,288
Taxes payable
2,047
Total inventories
5,376
Debt due within one year
7,490
Deferred income taxes
882
Prepaid expenses & other receivables
1,991
Total current assets
$
18,697
Total current liabilities
$
20,093
Property, plant, and equip., at cost
30,215
Long-term debt
12,217
Less: Accumulated depreciation
9,653
Deferred income taxes
2,543
Net plant and equipment
$
20,562
Other non-current liabilities
3,504
Net goodwill & other intangible assets
23,970
Total liabilities
$
38,357
Other non-current assets
1,622
Convertible Class A preferred stock
1,696
Common stock
1,608
Retained earnings
23,190
Total stockholders’ equity (deficit)
$
26,494
Total assets
$
64,851
Total liabilities and stockholders’ equity
$
64,851
Calculate all the ratios, for which industry figures are available below, for Nederland and compare the firm’s ratios with the industry ratios.
(Round current ratio, quick ratio, debt ratio, long term debt ratio answers to 2 decimal places, e.g. 12.25 and other answers to 1 decimal place, e.g.12.5 or 12.5%.)
Industry Average
Current Ratio
2.05
[removed]
times
Quick Ratio
0.78
[removed]
times
Gross margin
23.9
%
[removed]
%
Net profit margin
12.3
%
[removed]
%
Debt ratio
0.23
[removed]
times
Long-term debt to equity
0.98
[removed]
times
Interest coverage
5.62
[removed]
ROA
5.3
%
[removed]
%
ROE
18.8
%
[removed]
%
.
Black Ink Cashflow Secrets Your Accountant Never Shared
Tom Shay's presentation on how to accurately predict the cash position of a business for a 12 month time period. www.profitsplus.org
BUSI 320 Comprehensive Problem 1 Version FALL BUse the followin.docx
BUSI 320 Comprehensive Problem 1 Version FALL B
Use the following information to answer the questions below:
note: all sales are credit sales
Income Stmt info:
2014
2015
Sales
$ 1,050,000
$ 1,128,750
less Cost of Goods Sold:
325,000
346,125
Gross Profit
725,000
782,625
Operating Expenses
575,000
609,500
Earnings before Interest & Taxes
150,000
173,125
Interest exp
25,000
29,000
earnings before Taxes
125,000
144,125
Taxes
50,000
57,650
Net Income
$ 75,000
$ 86,475
Balance Sheet info:
12/31/2014
12/31/2015
Cash
60,000
$ 66,000
Accounts Receivable
80,000
$ 83,200
Inventory
110,000
$ 119,900
Total Current Assets
$ 250,000
$ 269,100
Fixed Assets (Net)
$ 300,000
$ 318,000
Total Assets
$ 550,000
$ 587,100
Current Liabilities
$ 130,000
$ 136,500
Long Term Liabilities
$ 150,000
$ 170,000
Total Liabilities
$ 280,000
$ 306,500
Stockholder's Equity
$ 270,000
$ 280,600
Total Liab & Equity:
$ 550,000
$ 587,100
Compute each of the following ratios for 2014 and 2015 and
indicate whether each ratio was getting "better" or "worse" from 2014 to 2015
and whether the 2015 ratio was "good" or "bad" compared to the Industry Avg.
(round all numbers to 2 digits past the decimal place)
2014
2015
Getting Better or Getting Worse?
2015 Industry Avg
"Good" or "Bad" compared to Industry Avg
Profit Margin
0.11
Current Ratio
1.90
Quick Ratio
1.12
Return on Assets
.26
Debt to Assets
.55
Receivables turnover
18.00
Avg. collection period*
21.20
Inventory Turnover**
8.25
Return on Equity
0.25
Times Interest Earned
8.15
*Assume a 360 day year
**Inventory Turnover can be computed 2 different ways. Use the formula listed in the text
(the one the text indicates many credit reporting agencies generally use)
...
1Exercise 8-4The ledger of Wainwright Company at the end of .docx
1Exercise 8-4
The ledger of Wainwright Company at the end of the current year shows Accounts Receivable $76,000; Credit Sales $801,000; and Sales Returns and Allowances $50,000. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
(a)
If Wainwright uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Wainwright determines that Hiller’s $1,000 balance is uncollectible.
(b)
If Allowance for Doubtful Accounts has a credit balance of $990 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 11% of accounts receivable.
(c)
If Allowance for Doubtful Accounts has a debit balance of $850 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 8% of accounts receivable.
No.
Account Titles and Explanation
Debit
Credit
(a)
(b)
(c)
Exercise 8-4
Accounts Payable
Accounts Receivable
Accumulated Depreciation-Equipment
Allowance for Doubtful Accounts
Bad Debt Expense
Cash
Common Stock
Cost of Goods Sold
Dividends
Income Tax Expense
Income Taxes Payable
Interest Receivable
Interest Revenue
Inventory
No Entry
Notes Receivable
Other Operating Expenses
Other Receivables
Retained Earnings
Sales Discounts
Sales Returns and Allowances
Sales Revenue
Service Charge Expense
Supplies
Supplies Expense
Exercise 8-11
Suppose the following information was taken from the 2014 financial statements of FedEx Corporation, a major global transportation/delivery company.
(in millions)
2014
2013
Accounts receivable (gross)
$ 3,480
$ 4,430
Accounts receivable (net)
3,472
4,401
Allowance for doubtful accounts
8
29
Sales revenue
34,728
37,059
Total current assets
7,883
7,166
Answer each of the following questions.
Calculate the accounts receivable turnover and the average collection period for 2014 for FedEx. (Round answers to 1 decimal place, e.g. 12.5. Use 365 days for calculation.)
Accounts receivable turnover
times
The average collection period for 2014
days
Is accounts receivable a material component of the company’s total current assets?
2
Broadening Your Perspective 8-1
The financial statements of Tootsie Roll are presented below.
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
Earnings, Comprehensive Earnings and Retained Earnings (in thousands except per share data)
For the year ended December 31,
2011
2010
2009
Net product sales
$528,369
$517,149
$495,592
Rental and royalty revenue
4,136
4,299
3,739
Total revenue
532,505
521,448
499,331
Product cost of goods sold
365,225
349,334
319,775
Rental and royalty cost
1,038
1,088
852
Total costs
366,263
350,422
320,627
Product gross margin
163,144
167,815
175,817
Rental and royalty gross margin
3,098
3,211
2,887
Total gross margin
166,242
171,026
178.
Comparative ratio analysis
Comparative ratio analysis on Coca-cola and Pepsi
Analysis and comparison study of both companies on the basis of
▪ Profitability ratios
▪ RETURN ON ENVESTMENT
▪ RETURN ON SHAREHOLDER’S FUND
▪ RETURN ON ASSET
▪ GROSS PROFIT RATIO
▪ NET PROFIT RATIO
▪ Liquidity ratios
▪ Current ratio
▪ Quickratio
▪ Turnover ratio
▪ CAPITAL TURNOVER RATIO
▪ FIXED ASSETS TURNOVER RATIO
▪ WORKING CAPITAL TURNOVER RATIO
▪ Solvency ratio
▪ Debt-Equity ratio
The analysis is done on the basis of company balance sheet and profit & loss account.
The financial statements of ABC Co. appear belowABC Co.Comp.docx
The financial statements of ABC Co. appear below:
ABC Co.
Comparative Balance Sheet
December 31, 2014
ASSETS
2014
2013
Cash
$25,000
$40,000
Marketable Securities
20,000
60,000
Accounts Receivable (net)
40,000
30,000
Inventory
150,000
170,000
Property, Plant and Equipment (net)
170,000
200,000
Total assets
$405,000
$500,000
Liabilities and Stockholders’ equity
Accounts Payable
$25,000
$30,000
Short Term Notes Payable
40,000
90,000
Bonds Payable
75,000
160,000
Common Stock
175,000
145,000
Retained Earnings
90,000
75,000
Total Liabilities and Stockholders’ Equity
$405,000
$500,000
ABC Co.
Income Statement
For the Year Ended December 31, 2014
Net Sales
$360,000
Cost of Goods Sold
184,000
Gross Profit
176,000
Expenses
Interest Expense
21,000
Selling Expense
30,000
Administrative Expense
20,000
Total Expenses
71,000
Income before income taxes
105,000
Income tax expense
30,000
Net income
$75,000
Additional information:
a. Cash dividends of $50,000 were declared and paid in 2014.
b. Weighted average number of shares of common stock outstanding during 2014 was 62,000 shares
c. Market value of common stock on December 31, 2014 was $15 per share.
d. Net cash provided by operating activities for 2014 was $65,000
Instructions:
Using the financial statements and additional information, compute the following ratios for ABC Co. for 2014. Show all computations.
1. Current ratio
2. Return on common stockholders equity
3. Price earnings ratio
4. Inventory turnover ratio
5. Receivables turnover
6. Times interest earned
7. Profit margin ratio
8. Average days in inventory
9. Payout ratio
10. Return on assets
...
The financial statements of ABC Co. appear belowABC Co.Compar.docx
The financial statements of ABC Co. appear below:
ABC Co.
Comparative Balance Sheet
December 31, 2014
ASSETS
2014
2013
Cash
$25,000
$40,000
Marketable Securities
20,000
60,000
Accounts Receivable (net)
40,000
30,000
Inventory
150,000
170,000
Property, Plant and Equipment (net)
170,000
200,000
Total assets
$405,000
$
500,000
Liabilities and Stockholders’ equity
Accounts Payable
$25,000
$30,000
Short Term Notes Payable
40,000
90,000
Bonds Payable
75,000
160,000
Common Stock
175,000
145,000
Retained Earnings
90,000
75,000
Total Liabilities and Stockholders’ Equity
$405,000
$500,000
ABC Co.
Income Statement
For the Year Ended December 31, 2014
Net Sales
$360,000
Cost of Goods Sold
184,000
Gross Profit
176,000
Expenses
Interest Expense
21,000
Selling Expense
30,000
Administrative Expense
20,000
Total Expenses
71,000
Income before income taxes
105,000
Income tax expense
30,000
Net income
$75,000
Additional information:
a.
Cash dividends of $50,000 were declared and paid in 2014.
b.
Weighted average number of shares of common stock outstanding during 2014 was 62,000 shares
c.
Market value of common stock on December 31, 2014 was $15 per share.
d.
Net cash provided by operating activities for 2014 was $65,000
Instructions:
Using the financial statements and additional information, compute the following ratios for ABC Co. for 2014.
Show all computations.
1.
Current ratio
2.
Return on common stockholders equity
3.
Price earnings ratio
4.
Inventory turnover ratio
5.
Receivables turnover
6.
Times interest earned
7.
Profit margin ratio
8.
Average days in inventory
9.
Payout ratio
10.
Return on assets
.
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BUSI 320 Comprehensive Problem 1 Version FALL BUse the followin.docx
BUSI 320 Comprehensive Problem 1 Version FALL B
Use the following information to answer the questions below:
note: all sales are credit sales
Income Stmt info:
2014
2015
Sales
$ 1,050,000
$ 1,128,750
less Cost of Goods Sold:
325,000
346,125
Gross Profit
725,000
782,625
Operating Expenses
575,000
609,500
Earnings before Interest & Taxes
150,000
173,125
Interest exp
25,000
29,000
earnings before Taxes
125,000
144,125
Taxes
50,000
57,650
Net Income
$ 75,000
$ 86,475
Balance Sheet info:
12/31/2014
12/31/2015
Cash
60,000
$ 66,000
Accounts Receivable
80,000
$ 83,200
Inventory
110,000
$ 119,900
Total Current Assets
$ 250,000
$ 269,100
Fixed Assets (Net)
$ 300,000
$ 318,000
Total Assets
$ 550,000
$ 587,100
Current Liabilities
$ 130,000
$ 136,500
Long Term Liabilities
$ 150,000
$ 170,000
Total Liabilities
$ 280,000
$ 306,500
Stockholder's Equity
$ 270,000
$ 280,600
Total Liab & Equity:
$ 550,000
$ 587,100
Compute each of the following ratios for 2014 and 2015 and
indicate whether each ratio was getting "better" or "worse" from 2014 to 2015
and whether the 2015 ratio was "good" or "bad" compared to the Industry Avg.
(round all numbers to 2 digits past the decimal place)
2014
2015
Getting Better or Getting Worse?
2015 Industry Avg
"Good" or "Bad" compared to Industry Avg
Profit Margin
0.11
Current Ratio
1.90
Quick Ratio
1.12
Return on Assets
.26
Debt to Assets
.55
Receivables turnover
18.00
Avg. collection period*
21.20
Inventory Turnover**
8.25
Return on Equity
0.25
Times Interest Earned
8.15
*Assume a 360 day year
**Inventory Turnover can be computed 2 different ways. Use the formula listed in the text
(the one the text indicates many credit reporting agencies generally use)
...
1Exercise 8-4The ledger of Wainwright Company at the end of .docx
1Exercise 8-4
The ledger of Wainwright Company at the end of the current year shows Accounts Receivable $76,000; Credit Sales $801,000; and Sales Returns and Allowances $50,000. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
(a)
If Wainwright uses the direct write-off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Wainwright determines that Hiller’s $1,000 balance is uncollectible.
(b)
If Allowance for Doubtful Accounts has a credit balance of $990 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 11% of accounts receivable.
(c)
If Allowance for Doubtful Accounts has a debit balance of $850 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 8% of accounts receivable.
No.
Account Titles and Explanation
Debit
Credit
(a)
(b)
(c)
Exercise 8-4
Accounts Payable
Accounts Receivable
Accumulated Depreciation-Equipment
Allowance for Doubtful Accounts
Bad Debt Expense
Cash
Common Stock
Cost of Goods Sold
Dividends
Income Tax Expense
Income Taxes Payable
Interest Receivable
Interest Revenue
Inventory
No Entry
Notes Receivable
Other Operating Expenses
Other Receivables
Retained Earnings
Sales Discounts
Sales Returns and Allowances
Sales Revenue
Service Charge Expense
Supplies
Supplies Expense
Exercise 8-11
Suppose the following information was taken from the 2014 financial statements of FedEx Corporation, a major global transportation/delivery company.
(in millions)
2014
2013
Accounts receivable (gross)
$ 3,480
$ 4,430
Accounts receivable (net)
3,472
4,401
Allowance for doubtful accounts
8
29
Sales revenue
34,728
37,059
Total current assets
7,883
7,166
Answer each of the following questions.
Calculate the accounts receivable turnover and the average collection period for 2014 for FedEx. (Round answers to 1 decimal place, e.g. 12.5. Use 365 days for calculation.)
Accounts receivable turnover
times
The average collection period for 2014
days
Is accounts receivable a material component of the company’s total current assets?
2
Broadening Your Perspective 8-1
The financial statements of Tootsie Roll are presented below.
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
Earnings, Comprehensive Earnings and Retained Earnings (in thousands except per share data)
For the year ended December 31,
2011
2010
2009
Net product sales
$528,369
$517,149
$495,592
Rental and royalty revenue
4,136
4,299
3,739
Total revenue
532,505
521,448
499,331
Product cost of goods sold
365,225
349,334
319,775
Rental and royalty cost
1,038
1,088
852
Total costs
366,263
350,422
320,627
Product gross margin
163,144
167,815
175,817
Rental and royalty gross margin
3,098
3,211
2,887
Total gross margin
166,242
171,026
178.
Comparative ratio analysis
Comparative ratio analysis on Coca-cola and Pepsi
Analysis and comparison study of both companies on the basis of
▪ Profitability ratios
▪ RETURN ON ENVESTMENT
▪ RETURN ON SHAREHOLDER’S FUND
▪ RETURN ON ASSET
▪ GROSS PROFIT RATIO
▪ NET PROFIT RATIO
▪ Liquidity ratios
▪ Current ratio
▪ Quickratio
▪ Turnover ratio
▪ CAPITAL TURNOVER RATIO
▪ FIXED ASSETS TURNOVER RATIO
▪ WORKING CAPITAL TURNOVER RATIO
▪ Solvency ratio
▪ Debt-Equity ratio
The analysis is done on the basis of company balance sheet and profit & loss account.
The financial statements of ABC Co. appear belowABC Co.Comp.docx
The financial statements of ABC Co. appear below:
ABC Co.
Comparative Balance Sheet
December 31, 2014
ASSETS
2014
2013
Cash
$25,000
$40,000
Marketable Securities
20,000
60,000
Accounts Receivable (net)
40,000
30,000
Inventory
150,000
170,000
Property, Plant and Equipment (net)
170,000
200,000
Total assets
$405,000
$500,000
Liabilities and Stockholders’ equity
Accounts Payable
$25,000
$30,000
Short Term Notes Payable
40,000
90,000
Bonds Payable
75,000
160,000
Common Stock
175,000
145,000
Retained Earnings
90,000
75,000
Total Liabilities and Stockholders’ Equity
$405,000
$500,000
ABC Co.
Income Statement
For the Year Ended December 31, 2014
Net Sales
$360,000
Cost of Goods Sold
184,000
Gross Profit
176,000
Expenses
Interest Expense
21,000
Selling Expense
30,000
Administrative Expense
20,000
Total Expenses
71,000
Income before income taxes
105,000
Income tax expense
30,000
Net income
$75,000
Additional information:
a. Cash dividends of $50,000 were declared and paid in 2014.
b. Weighted average number of shares of common stock outstanding during 2014 was 62,000 shares
c. Market value of common stock on December 31, 2014 was $15 per share.
d. Net cash provided by operating activities for 2014 was $65,000
Instructions:
Using the financial statements and additional information, compute the following ratios for ABC Co. for 2014. Show all computations.
1. Current ratio
2. Return on common stockholders equity
3. Price earnings ratio
4. Inventory turnover ratio
5. Receivables turnover
6. Times interest earned
7. Profit margin ratio
8. Average days in inventory
9. Payout ratio
10. Return on assets
...
The financial statements of ABC Co. appear belowABC Co.Compar.docx
The financial statements of ABC Co. appear below:
ABC Co.
Comparative Balance Sheet
December 31, 2014
ASSETS
2014
2013
Cash
$25,000
$40,000
Marketable Securities
20,000
60,000
Accounts Receivable (net)
40,000
30,000
Inventory
150,000
170,000
Property, Plant and Equipment (net)
170,000
200,000
Total assets
$405,000
$
500,000
Liabilities and Stockholders’ equity
Accounts Payable
$25,000
$30,000
Short Term Notes Payable
40,000
90,000
Bonds Payable
75,000
160,000
Common Stock
175,000
145,000
Retained Earnings
90,000
75,000
Total Liabilities and Stockholders’ Equity
$405,000
$500,000
ABC Co.
Income Statement
For the Year Ended December 31, 2014
Net Sales
$360,000
Cost of Goods Sold
184,000
Gross Profit
176,000
Expenses
Interest Expense
21,000
Selling Expense
30,000
Administrative Expense
20,000
Total Expenses
71,000
Income before income taxes
105,000
Income tax expense
30,000
Net income
$75,000
Additional information:
a.
Cash dividends of $50,000 were declared and paid in 2014.
b.
Weighted average number of shares of common stock outstanding during 2014 was 62,000 shares
c.
Market value of common stock on December 31, 2014 was $15 per share.
d.
Net cash provided by operating activities for 2014 was $65,000
Instructions:
Using the financial statements and additional information, compute the following ratios for ABC Co. for 2014.
Show all computations.
1.
Current ratio
2.
Return on common stockholders equity
3.
Price earnings ratio
4.
Inventory turnover ratio
5.
Receivables turnover
6.
Times interest earned
7.
Profit margin ratio
8.
Average days in inventory
9.
Payout ratio
10.
Return on assets
.
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1Exercise 8-4The ledger of Wainwright Company at the end of .docx
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The financial statements of ABC Co. appear belowABC Co.Comp.docx
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39O.docx
- 1. O.B MEAT PRODUCTS Bangued Central Market Bangued, Abra Olora B. Bayle 949-959-535 INCOME STATEMENT FOR THE YEAR ENDING DECEMBER 31, 2021 Gross Sales Php. 216,460.00 Less: Cost of Sale Inventory Beginning Php. 0.00 Add: Purchases 148,500.00 Total Goods for sale Php. 148,500.00 Less: Inventory End 0.00 148,500.00 Gross Income Php. 67,960.00 Less: Operating Expense Salary & Wages Php. 11,600.00 Taxes & Licenses 17,539.00 29,139.00 Net Income from operation 38,821.00 Add: Other Income 10,000.00 Net Income Php. 48,821.00 BALANCE SHEET AS OF DECEMBER 31, 2021 ASSET Cash on hand & in bank Php. 455,233.48 Add: Inventory End 0.00 Total Assets Php. 455,233.48 LIABILITIES & NETWORTH Accounts Payable Php. 0.00 O.B. Capital Php. 436,412.48 Less: Personal Drawing 30,000.00 Total 406,412.48 Add: Net Income 48,412.00 455,233.48 Total Liabilities & Networth Php. 455,233.48 Certified Correct: OLORA B. BAYLE Owner