Financial Accounting, Student Value Edition (4th Edition)
4th Edition
ISBN: 9780134114811
Author: Robert Kemp, Jeffrey Waybright
Publisher: PEARSON
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Chapter 12, Problem 1WC
To determine
Write a memo to your client explaining the comparison of the business with the industry averages and explain the client the significance of common-size financial statements.
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Following are data from the statements of two companies selling comparable products:
Current Year-End Balance Sheets
SunCompany
ZengCompany
Cash.........................................................................................
119.00
180.00
Notes receivable.......................................................................
77.00
32.00
Accounts receivable, net...........................................................
420.00
640.00
Merchandise inventory..............................................................
588.00
877.00
Prepaid expenses......................................................................
16.00
55.00
Plant and equipment, net...........................................................
2,321.00
2,744.00
Total assets...............................................................................…
Question Description
The following income statement and selected balance sheet account data are available for Treece, Inc., at December 31, 2013
Revenue:
Net sales………………………………………..$3,200,000
Interest income………………………………….. . 45,000
Gain on sale of marketable securities…….………...34,000
Total revenue…………………………………..$3,279,000
Costs and expenses:
Cost of goods sold…………………………………………... $1,620,000
Operating expenses (including depreciation of $150,000)….1, 240,000
Interest expense…………………………………………….…...42,000
Income taxes…………………………………………….……....100,000
Loss on sale of plant Assets.....................................................…...12,000
Total Costs and expenses…………………………..………. $3,014,000
Net income………………………………………….…………. $260,000
Changes in the Company’s balance sheet accounts over the year are summarized as follows:
Accounts receivable increased by $60,000
Accrued interest receivable decreased by $2,000
Inventory decreased by $60,000, and Account payable decreased by $16,000
Short term…
Following are data from the statements of two companies selling comparable products:Current Year-End Balance Sheets Nike Zing Company CompanyCash............................................................................................. 119.00 180.00Notes receivable ........................................................................... 77.00 32.00Accounts receivable, net ............................................................... 420.00 640.00Merchandise inventory ................................................................. 588.00 877.00Prepaid expenses .......................................................................... 16.00 55.00Plant and…
Chapter 12 Solutions
Financial Accounting, Student Value Edition (4th Edition)
Ch. 12 - Prob. 1DQCh. 12 - Which amount is the base amount for vertical...Ch. 12 - Prob. 3DQCh. 12 - Prob. 4DQCh. 12 - Prob. 5DQCh. 12 - Prob. 6DQCh. 12 - Prob. 7DQCh. 12 - How would you expect a recession to affect asset...Ch. 12 - Prob. 9DQCh. 12 - Prob. 10DQ
Ch. 12 - Prob. 1SCCh. 12 - Prob. 2SCCh. 12 - Prob. 3SCCh. 12 - Prob. 4SCCh. 12 - Prob. 5SCCh. 12 - Prob. 6SCCh. 12 - Prob. 7SCCh. 12 - Prob. 8SCCh. 12 - Prob. 9SCCh. 12 - Prob. 10SCCh. 12 - Prob. 11SCCh. 12 - Prob. 12SCCh. 12 - Prob. 1SECh. 12 - Prob. 2SECh. 12 - Prob. 3SECh. 12 - Prob. 4SECh. 12 - Prob. 5SECh. 12 - Prob. 6SECh. 12 - Prob. 7SECh. 12 - Prob. 8SECh. 12 - Prob. 9SECh. 12 - Prob. 10SECh. 12 - Prob. 11AECh. 12 - Prob. 12AECh. 12 - Horizontal analysis(Learning Objective 2)15-20...Ch. 12 - Prob. 14AECh. 12 - Prob. 15AECh. 12 - Prob. 16AECh. 12 - Prob. 17AECh. 12 - Prob. 18AECh. 12 - Prob. 19AECh. 12 - Prob. 20AECh. 12 - Horizontal analysis(Learning Objective 2)15-20...Ch. 12 - Prob. 22BECh. 12 - Prob. 23BECh. 12 - Prob. 24BECh. 12 - Prob. 25BECh. 12 - Prob. 26BECh. 12 - Prob. 27BECh. 12 - Prob. 28BECh. 12 - Prob. 29BECh. 12 - Prob. 30BECh. 12 - Prob. 31APCh. 12 - Prob. 32APCh. 12 - Prob. 33APCh. 12 - Prob. 34APCh. 12 - Prob. 35APCh. 12 - Prob. 36APCh. 12 - Prob. 37BPCh. 12 - Prob. 38BPCh. 12 - Prob. 39BPCh. 12 - Prob. 40BPCh. 12 - Prob. 41BPCh. 12 - Prob. 42BPCh. 12 - Prob. 1CECh. 12 - Prob. 1CPCh. 12 - Prob. 1EIACh. 12 - Prob. 2EIACh. 12 - Prob. 1FACh. 12 - Prob. 1IACh. 12 - Prob. 1SBACh. 12 - Prob. 1WC
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- Following are data from the statements of two companies selling comparable products:Current Year-End Balance Sheets Nike Zing Company CompanyCash............................................................................................. 119.00 180.00Notes receivable ........................................................................... 77.00 32.00Accounts receivable, net ............................................................... 420.00 640.00Merchandise inventory ................................................................. 588.00 877.00Prepaid expenses…arrow_forwardUsing the financial statements of Sultan Center in 2018, calculate the following ratios and interpret your results: current ratio calculations ........................ interpretation of results ....................... return on equity ratio calculations ....................... interpretation of results ...................... profit margin calculations ......................... interpretation of results ........................... debt to equity ratio calculations ............................ interpretation of results ............................ (financial statements listed below and also company website for more information) https://cis.boursakuwait.com.kw/Portal/FData/610_BL_2019_9_E_293202094434260.pdfarrow_forwardCommercialServices.com Corporation provides business-to-business services on the Internet. Data concerning the most recent year appear below:Sales .................................................................................. $3,000,000Net operating income ......................................................... $150,000Average operating assets .................................................. $750,000Required:Consider each question below independently. Carry out all computations to two decimal places.1. Compute the company’s return on investment (ROI).2. The entrepreneur who founded the company is convinced that sales will increase next year by 50%and that net operating income will increase by 200%, with no increase in average operating assets.What would be the company’s ROI?3. The chief financial officer of the company believes a more realistic scenario would be a $1,000,000increase in sales, requiring a $250,000 increase in average operating assets, with a resulting…arrow_forward
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- The following information came from a recent balance sheet of Apple Computer, Inc.:End of Year Beginning of YearAssets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $53.9 billion $39.6 billionLiabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $26.0 billion ?Owners’ Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ? $21.0 billiona. Determine the amount of total liabilities reported in Apple Computer ’s balance sheet at thebeginning of the year.b. Determine the amount of total owners’ equity reported in Apple Computer ’s balance sheet atthe end of the year.c. Retained earnings was reported in Apple Computer ’s year-end balance sheet at $19.5 billion.If retained earnings was $13.8 billion at the beginning of the year, determine net income forthe year if no dividends were declared.arrow_forwardCalculate profitability measures The following information was available for the year ended December 31, 2013: Sales ....................................... $200,000Net income ............................. 30,000Average total assets ................ 500,000Average total stockholders’equity .................................. 300,000Dividends per share ................ $ 1.20Earnings per share .................. 3.00Market price per shareat year-end .......................... 48.00 Required:a. Calculate margin, turnover, and ROI for the year ended December 31, 2013.b. Calculate ROE for the year ended December 31, 2013.c. Calculate the price/earnings ratio for 2013.d. Calculate the dividend payout ratio for 2013.e. Calculate the dividend yield for 2013.arrow_forwardAnalytical case—complete an income statement and balance sheet usingfinancial ratio data Partially completed financial statements for Whittaker, Inc., follow: WHITTAKER, INC.Income StatementFor the Year Ended December 31, 2014Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ ?Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ?Gross profi t . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ ?Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ?Income from operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ ?Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ?Income…arrow_forward
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