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ACC557 Week 10 E14-3 E14-4 E14-13 P14-6A

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ACC557 Week 10 E14-3 E14-4 E14-13 P14-6A

E14-3 The comparative condensed balance sheets of Garcia Corporation are presented
below.



Instructions
(a) Prepare a horizontal analysis of the balance sheet data for Garcia Corporation using
2013 as a base.
(b) Prepare a vertical analysis of the balance sheet data for Garcia Corporation in columnar
form for 2014.

E14-4 The comparative condensed income statements of Hendi Corporation are shown below.


Comparative Condensed Income Statements
For the Years Ended December 31
20142013
Net sales 600,000 500,000
Cost of goods sold 468,000 400,000
Gross profit 132,000 100,000
Operating expenses 60,000 54,000
Net income 72,000 46,000

(a) Prepare a horizontal analysis of the income statement data for Hendi Corporation using 2013 as a base. (Show the amounts of increase or decrease.) (If amount and percentage are a decrease show the numbers as negative, e.g. -55,000, -20% or (55,000). (20%). Round percentages to 1 decimal place, e.g. 12.3%.)

(b) Prepare a vertical analysis of the income statement data for Hendi Corporation in columnar form for both years. (Round percentages to 1 decimal place, e.g. 12.3%.)


E14-13 Maulder Corporation has income from continuing operations of $290,000 for the year
ended December 31, 2014. It also has the following items (before considering income taxes).
1. An extraordinary loss of $70,000.
2. A gain of $35,000 on the discontinuance of a division.
3. A correction of an error in last year’s fi nancial statements that resulted in a $25,000
understatement of 2013 net income.
Assume all items are subject to income taxes at a 30% tax rate.

Instructions
(a) Prepare an income statement, beginning with income from continuing operations.
(b) Indicate the statement presentation of any item not included in (a) above.

P14-6 The comparative statements of Beulah Company are presented below.



Additional data:
The common stock recently sold at $19.50 per share.
Instructions
Compute the following ratios for 2014.
(a) Current. (h) Return on common stockholders’ equity.
(b) Acid-test. (i) Earnings per share.
(c) Accounts receivable turnover. (j) Price-earnings.
(d) Inventory turnover. (k) Payout.
(e) Profi t margin. (l) Debt to total assets.
(f) Asset turnover. (m) Times interest earned.
(g) Return on assets.

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