Compute the financial data for given year
Problem 1:
A comparative income statement is given below for McKenzie Sales, Ltd., of Toronto:
|
McKenzie Sales, Ltd. This Year |
Last Year |
|
|
Sales |
$7,370,000 |
$5,601,200 |
|
Cost of goods sold |
4,600,000 |
3,510,500 |
|
Gross margin |
2,770,000 |
2,090,700 |
|
Selling and administrative expenses: |
|
|
|
Selling expenses |
1,383.000 |
1,077,000 |
|
Administrative expenses |
703,000 |
608,500 |
|
Total expenses |
2.086.000 |
1.685.500 |
|
Net operating income |
684.000 |
405,200 |
|
Interest expense |
99,000 |
90.000 |
|
Net income before taxes |
$ 585,000 |
$ 315,200 |
Members of the company's board of directors are surprised to see that net income increased by only $269,800 when sales increased by $1.768,800.
Required:
1. Express each years income statement in common-size percentages. (Round your percentage answers to 1 decimal place
Problem 2:
Comparative financial statements for Weller Corporation, a merchandising company, for the fiscal year ending December 31 appear below. The company did not issue any new common stock during the year. A total of 500,000 shares of common stock were outstanding. The interest rate on the bond payable was 10%, the income tax rate was 40%, and the dividend per share of common stock was $0.50. The market value of the company's common stock at the end of the year was $27. All of the company's sales are on account.
Weller Corporation
Comparative Balance Sheet
(dollars In thousands)
|
Assets Current assets: |
This Yew |
Last Year |
|
Cash |
$ 1,100 |
$ 1,280 |
|
Accounts receivable, net |
9,600 |
6,900 |
|
Inventory |
13,400 |
12,300 |
|
Prepaid expenses |
610 |
680 |
|
Total current assets |
24,710 |
21,160 |
|
Property and equipment: |
|
|
|
Land |
10,900 |
10,900 |
|
Buildings and equipment, net |
48,910 |
36,290 |
|
|
|
|
|
Total property and equipment |
59.810 |
47,190 |
|
Total assets |
$84.520 |
$68,350 |
|
Liabilities and Stockholders' Equity |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$20,400 |
$ 18,600 |
|
Accrued liabilities |
930 |
770 |
|
Notes payable, short term |
290 |
290 |
|
Total current liabilities |
21,620 |
19,660 |
|
Long-term liabilities: |
|
|
|
Bonds payable |
9.000 |
9,000 |
|
Total liabilities |
30,620 |
28,660 |
|
Stockholders' equity: |
|
|
|
Common stock |
500 |
500 |
|
Additional paid-in capital |
MOO |
4,000 |
|
Total paid-In capital |
4,500 |
4,500 |
|
Retained earnings |
49,400 |
35,190 |
|
Total stockholders' equity |
53,900 |
39,690 |
|
Total liabilities and stockholders' equity |
$84,520 |
$68,350 |
Weller Corporation
Comparative Income Statement and Reconciliation
(dollars in thousands)
|
|
This Year |
Last Year |
|
Sales |
$76,000 |
$65,000 |
|
Cost of goods sold |
34,000 |
40,000 |
|
Gross margin |
42,000 |
25,000 |
|
Selling and administrative expenses: |
|
|
|
Selling expenses |
10,600 |
10,700 |
|
Administrative expenses |
6.400 |
6,400 |
|
Total selling and administrative expenses |
17,000 |
17,100 |
|
Net operating income |
25,000 |
7,900 |
|
Interest expense |
900 |
900 |
|
Net income before taxes |
24.100 |
7.000 |
|
Income taxes |
9.640 |
2,800 |
|
Net income |
14.460 |
4,200 |
|
Dividends to common stockholders |
250 |
250 |
|
Net income added to retained earnings |
14,210 |
3,950 |
|
Beginning retained earnings |
35,190 |
31,240 |
|
Ending retained earnings |
$49,400 |
$35,190 |
Required:
Compute the following financial data and ratios for this year
1. Working capital.
2. Current ratio. (Round your answer to 2 decimal places.)
3. Acid - test ratio. (Round your answer to 2 decimal places.)
Problem 3:
Comparative financial statements for Weller Corporation, a merchandising company, for the fiscal year ending December 31 appear below. The company did not issue any new common stock during the year. A total of 600,000 shares of common stock were outstanding. The interest rate on the bond payable was 10%, the income tax rate was 40%, and the dividend per share of common stock was $0.50. The market value of the company's common stock at the end of the year was $26. All of the company's sales are on account.
Weller Corporation
Comparative Balance Sheet
(dollars in thousands)
|
Assets Current assets: |
ThIs Year |
Last Year |
|||
|
Cash |
$ 1,150 |
$ 1,350 |
|||
|
Accounts receivable, net |
10.000 |
7,100 |
|||
|
Inventory |
12,200 |
11,900 |
|||
|
Prepaid expenses |
670 |
520 |
|||
|
Total current assets |
24,020 |
20,870 |
|||
|
Property and equipment: |
|
|
|||
|
Land |
9,900 |
9,900 |
|||
|
Buildings and equipment, net |
49,586 |
40,274 |
|||
|
Total property and equipment |
59,486 |
50,174 |
|||
|
Total assets |
$83,506 |
$71,044 |
|||
|
Liabilities and Stockholders' Equity |
|
|
|||
|
Current liabilities: |
|
|
|||
|
Accounts payable |
$19,600 |
$17,700 |
|||
|
Accrued liabilities |
960 |
880 |
|||
|
Notes payable, shod term |
260 |
260 |
|||
|
Total current liabilities |
20,820 |
18,840 |
|||
|
Long-term liabilities: |
|
|
|||
|
Bonds payable |
9,600 |
9,600 |
|||
|
Total liabilities |
30,420 |
28,440 |
|||
|
Stockholders' equity: |
|
|
|||
|
Common stock |
600 |
600 |
|||
|
Additional paid-in capital |
4,000 |
4,000 |
|||
|
Total paid-in capital |
4.600 |
4,600 |
|||
|
Retained earnings |
48,486 |
38,004 |
|||
|
Total stockholders' equity |
53,086 |
42,604 |
|||
|
Total liabilities and stockholders' equity |
$83,506 |
$ 71,044 |
|||
|
|
|
|
|||
|
Weller Corporation Comparative Income Statement Reconciliation and (dollars In thousands) |
|||||
|
|
This Year |
Last Year |
|
||
|
Sales |
$74,385 |
$64,000 |
|
||
|
Cost of goods sold |
37,355 |
34,000 |
|
||
|
Gross margin |
37,030 |
30.000 |
|
||
|
Selling and administrative expenses: |
|
|
|
||
|
Selling expenses |
10,900 |
10,500 |
|
||
|
Administrative expenses |
7,200 |
6,600 |
|
||
|
|
|
||||
|
Total selling and administrative expenses |
18,100 |
17,100 |
|
||
|
Net operating income |
18,930 |
12,900 |
|
||
|
Interest expense |
960 |
960 |
|
Net income before taxes |
17,970 |
11,940 |
|
Income taxes |
7,188 |
4,776 |
|
Net Income |
10,782 |
7,164 |
|
Dividends to common stockholders |
300 |
300 |
|
Net income added to retained earnings |
10,482 |
6,864 |
|
Beginning retained earnings |
38,004 |
31,140 |
|
Ending retained earnings |
$48,486 |
$38,004 |
Required:
Compute the following financial data for this year.
1. Accounts receivable turnover. (Assume that all sales are on account.) (Round your answer to 2 decimal places.)
2. Average collection period. (Use 365 days In a year. Round your Intermediate calculations and final answer to 2 decimal places.)
3. Inventory turnover. (Round your answer to 2 decimal places.)
4. Average sale period. (Use 365 days In a year. Round your Intermediate calculations and final answer to 2 decimal places.)
5. Operating cycle. (Round your intermediate calculations and final answer to 2 decimal places.)
6. Total asset turnover. (Round your answer to 2 decimal places.)
Problem 4:
Comparative financial statements for Weller Corporation, a merchandising company, for the fiscal year ending December 31 appear below. The company did not Issue any new common stock during the year. A total of 700,000 shares of common stock were outstanding. The interest rate on the bond payable was 10%, the income tax rate was 40%, and the dividend per share of common stock was $.75. The market value of the company's common stock at the end of the year was $28. All of the company's sales are on account.
Weller Corporation
Comparative Balance Sheet
(dollars In thousands)
|
Assets Current assets: |
This Year |
Last Year |
|
Cash |
$ 1,220 |
$ 1,280 |
|
Accounts receivable, not |
10,300 |
8,100 |
|
Inventory |
13,000 |
12,100 |
|
Prepaid expenses |
790 |
620 |
|
Total current assets |
25,310 |
22.100 |
|
Property and equipment: |
|
|
|
Land |
10,200 |
10,200 |
|
Buildings and equipment, net |
41,718 |
41,209 |
|
Total property and equipment |
51,918 |
51,409 |
|
Total assets |
$77,228 |
$73,509 |
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$19.000 |
$ 18,600 |
|
Accrued liabilities |
1,030 |
800 |
|
Notes payable, short term |
0 |
250 |
|
Total current liabilities |
20,030 |
19,650 |
|
Long-term liabilities: |
|
|
|
Bonds payable |
9,600 |
9,600 |
|
Total liabilities |
29,630 |
29,250 |
|
Stockholders' equity: |
|
|
|
Common stock |
2,000 |
2,000 |
|
Additional paid•in capital |
4,000 |
4,000 |
|
Total paid-in capital |
6.000 |
6,000 |
|
Retained earnings |
41,598 |
38,259 |
|
Total stockholders' equity |
47,598 |
44,259 |
|
Total liabilities and stockholders' equity |
$77,228 |
$73,509 |
Weller Corporation
Comparative Income Statement and Reconciliation
(dollars in thousands)
|
|
This Year Last Year |
|
|
Sales |
$67,000 |
$64,000 |
|
Cost of goods sold |
41,000 |
33,000 |
|
Gross margin |
26,000 |
31,000 |
|
Selling and administrative expenses: |
|
|
|
Selling expenses |
11,500 |
|
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Rating:
/5
