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ACC291 Week 5 E13-1 E13-8 E14-1 P13-9A P13-10A P14-2A

Price: $8.99


• Exercise E13-1
• Exercise E13-8
• Exercise E14-1
• Problem P13-9A
• Problem P13-10A
• Problem P14-2

E13-1 Pioneer Corporation had these transactions during 2011.

(a) Issued $50,000 par value common stock for cash.
(b) Purchased a machine for $30,000, giving a long-term note in exchange.
(c) Issued $200,000 par value common stock upon conversion of bonds having a face value of
$200,000.
(d) Declared and paid a cash dividend of $18,000.
(e) Sold a long-term investment with a cost of $15,000 for $15,000 cash.
(f) Collected $16,000 of accounts receivable.
(g) Paid $18,000 on accounts payable.

Instructions
Analyze the transactions and indicate whether each transaction resulted in a cash flow from
operating activities, investing activities, financing activities, or noncash investing and financing

activities.



E13-8 Here are comparative balance sheets for Taguchi Company.

TAGUCHI COMPANY
Comparative Balance Sheets
31-Dec
Assets20112010
Cash 73,000 22,000
Accounts Receivable 85,000 76,000
Inventories 170,000 189,000
Land 75,000 100,000
Equipment 260,000 200,000
Accumulated Depreciation (66,000) (32,000)
   Total 597,000 555,000
Liabilities and Stockholders’ Equity
Accounts payable 39,000 47,000
Bonds payable 150,000 200,000
Common stock ($1 par) 216,000 174,000
Retained earnings 192,000 134,000
Total 597,000 555,000

Additional information:
1. Net income for 2011 was $103,000.
2. Cash dividends of $45,000 were declared and paid.
3. Bonds payable amounting to $50,000 were redeemed for cash $50,000.
4. Common stock was issued for $42,000 cash.
5. No equipment was sold during 2011, but land was sold at cost.

Instructions
Prepare a statement of cash flows for 2011 using the indirect method.

P13-9A Condensed financial data of Arma Inc. follow.

Arma Inc.
Comparative Balance Sheet 
31-Dec
Assets  2,011 2,010
Cash  90,800 48,400
Accounts receivable  92,800 33,000
Inventories  112,500 102,850
Prepaid expenses  28,400 26,000
Investments  138,000 114,000
Plant assets  270,000 242,500
Accumulated depreciation  (50,000) (52,000)
Total  682,500 514,750
Liabilities and S.E
Accounts payable  112,000 67,300
Accrued expenses payable  16,500 17,000
Bonds payable  110,000 150,000
Common stock  220,000 175,000
Retained earnings  224,000 105,450
Total  682,500 514,750
Arma Inc.
Income Statement
For the Year Ended December 31, 2011
Sales  392,780
Less: 
Cost of goods sold  135,460
Operating expenses, excluding  dep. 12,410
Depreciation expense  46,500
Income taxes  27,280
Interest expense  4,730
Loss on sale of plant assets  7,500 233,880
Net income  158,900

Additional information:
1. New plant assets costing $85,000 were purchased for cash during the year.
2. Old plant assets having an original cost of $57,500 were sold for $1,500 cash.
3. Bonds matured and were paid off at face value for cash.
4. A cash dividend of $40,350 was declared and paid during the year.

Instructions

Prepare a statement of cash flows using the indirect method.

*P13-10A Data for Arma Inc. are presented in P13-9A. Further analysis reveals that accounts
payable pertain to merchandise creditors.

E14-1 Financial information for Blevins Inc. is presented below.

Current assets  125,000 100,000
Plant assets (net)  396,000 330,000
Current liabilities  91,000 70,000
Long-term liabilities  133,000 95,000
Common stock, $1 par  161,000 115,000
Retained earnings  136,000 150,000

Instructions

Prepare a schedule showing a horizontal analysis for 2012 using 2011 as the base year.
P14-2 The comparative statements of Villa Tool Company are presented below.

VILLA TOOL COMPANY
Income Statement
For the Year Ended December 31
20122011
Net sales 1,818,500 1,750,500
Cost of goods sold 1,011,500 996,000
Gross profit 807,000 754,500
Selling and adm. Expense 516,000 479,000
Income from operations  291,000 275,500
Other expenses and losses
Interest expense 18,000 14,000
Income before income taxes 273,000 261,500
Income tax expense 81,000 77,000
Net income 192,000 184,500
VILLA TOOL COMPANY
Balance Sheet
For the Year Ended December 31
Assets20122011
Current assets
   Cash 60,100 64,200
   Short term investments 69,000 50,000
   Accounts receivable 117,800 102,800
   Inventory 123,000 115,500
Total current assets 369,900 332,500
Plant assets 600,300 520,300
Total assets 970,200 852,800
Liabilities and Stockholders' Equity
Current liabilities
   Accounts payable 160,000 145,400
   Income taxes payable 43,500 42,000
Total current liabilities 203,500 187,400
Bonds payable 200,000 200,000
Total liabilities 403,500 387,400
Stockholders' equity
Common stock 280,000 300,000
Retained earnings 286,700 165,400
Total stockholders' equity 566,700 465,400
Total liabilities and stockholders' equity 970,200 852,800

Instructions
Compute the following ratios for 2012. (Weighted-average common shares in 2012 were 57,000,
and all sales were on account.)

(a) Earnings per share. (f) Receivables turnover.
(b) Return on common stockholders’ equity. (g) Inventory turnover.
(c) Return on assets. (h) Times interest earned.
(d) Current. (i) Asset turnover.
(e) Acid-test. (j) Debt to total assets.

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