ACC 561 week 2 Wiley PLUS Assignment E13-5 E13-6 E13-9

ACC 561 week 2 Wiley PLUS Assignment E13-5 E13-6 E13-9

E13-5 The comparative balance sheets of Nike, Inc. are presented here.

NIKE INC.

Comparative Balance Sheets

May 31

($ in millions)

Assets 2007 2006

Current assets $8,076 $7,346

Property, plant, and equipment (net) 1,678 1,658

Other assets 934 866

Total assets $10,688 $9,870

Liabilities and Stockholders' Equity

Current liabilities $2,584 $2,612

Long-term liabilities 1,079 973

Stockholders' equity 7,025 6,285

Total liabilities and stockholders' equity $10,688 $9,870

Complete the horizontal analysis of the balance sheet data for Nike using 2006 as a base. (If amount decreases, use either a negative sign preceding the number, e.g. -45 or parenthesis, e.g. (45). Roun all percentages to 1 decimal place, e.g. 12.5.)

NIKE, INC.

Condensed Balance Sheet

December 31

($ in millions)

Increase or (Decrease)

2007 2006 Amount Percentage

Assets

Current assets $8,076 $7,346 $730 9.9%

E13-6 Here are the comparative income statements of Winfrey Corporation.

WINFREY CORPORATION

Comparative Income Statements

For the Years Ended December 31

2010 2009

Net sales $598,000 $520,000

Cost of goods sold 477,000 450,000

Gross profit $121,000 $ 70,000

Operating expenses 80,000 45,000

Net income $ 41,000 $ 25,000

 

Instructions

(a) Prepare a horizontal analysis of the income statement data for Winfrey Corporation using 2009 as a base. (Show the amounts of increase or decrease.)

(b) Prepare a vertical analysis of the income statement data for Winfrey Corporation for both years

E13-9 Armada Company has these comparative balance sheet data:

ARMADA COMPANY

Balance Sheets

Additional information for 2010:

1. Net income was $25,000.

2. Sales on account were $375,000. Sales returns and allowances amounted to $25,000.

3. Cost of goods sold was $198,000.

4. Net cash provided by operating activities was $48,000.

5. Capital expenditures were $25,000, and cash dividends were $18,000.

Compute the following ratios at December 31, 2010. (Round to 3 decimal places, e.g. 2.515.)Current :1

Receivables turnover times

Average collection period days

Inventory turnover times

Days in inventory days

Cash debt coverage times

Current cash debt coverage times

Free cash flow $ 

SOLUTION PREVIEW

EXERCISE 13-5

(a)       

NIKE, INC.

Condensed Balance Sheet May 31

($ in millions)

	2007	2006	Increase (Decrease)	Percentage Change from 2006
Assets             Current assets             Property, plant, and               equipment (net)             Other assets             Total assets	$  8,076      1,678        934 $10,688	$7,346     1,658      866 $9,870	$730       20      68 $818	9.9%   1.2% 7.9% 8.3%

 

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Mary Coleman opened Mary’s Maids Cleaning Service Inc. on July 1, 2006. During July, the following transactions were completed.

Mary Coleman opened Mary’s Maids Cleaning Service Inc. on July 1, 2006. During July, the following transactions were completed.

Week Tree Assignment

Mary Coleman opened Mary’s Maids Cleaning Service Inc. on July 1, 2006. During July, the following transactions were completed.

1-Jul Issued $14,000 of common stock for $14,000 cash.

1     Purchased a used truck for $10,000, paying $3,000 cash and the balance on account.
3 Purchased cleaning supplies for $800 on account.
5Paid $2,400 on a one-year insurance policy, effective July 1.
12 Billed customers $3,800 for cleaning services.
18 Paid $1,000 of amount owed on truck, and $400 of amount owed on cleaning supplies.
20 Paid $1,600 for employee salaries.
21 Collected $1,400 from customers billed on July 12.
25 Billed customers $2,500 for cleaning services.
31 Paid gas and oil for the month on the truck, $400.
31 Declared and paid a $600 cash dividend.

The chart of accounts for Mary’s Maids Cleaning Service Inc. contains the following accounts:

No. 101 Cash,
No. 112 Accounts Receivable,
No. 128 Cleaning Supplies,
No. 130 Prepaid Insurance,
No. 157 Equipment,
No. 158 Accumulated Depreciation—Equipment,
No. 201 Accounts Payable,
No. 212 Salaries Payable,
No. 311 Common Stock,
No. 320 Retained Earnings,
No. 332 Dividends,
No. 350 Income Summary,
No. 400 Service Revenue,
No. 633 Gas & Oil Expense,
No. 634 Cleaning Supplies Expense,
No. 711 Depreciation Expense,
No. 722 Insurance Expense,
No. 726 Salaries Expense.

Instructions

(a) Journalize and post the July transactions. Use page J1 for the journal.

(b) Prepare a trial balance at July 31 on a work sheet.

(b) Trial balance totals $26,700

(c) Enter the following adjustments on the work sheet, and complete the work sheet.
(1) Earned but unbilled fees at July 31 were $1,300.
(2) Depreciation on equipment for the month was $200.
(3) One-twelfth of the insurance expired.
(4) An inventory count shows $300 of cleaning supplies on hand at July 31.
(5) Accrued but unpaid employee salaries were $500.

(d) Journalize and post the adjusting entries. Use page J2 for

 

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GB 518 Unit 04 Assignment - Unit 4 - Reporting and Analyzing Receivables and Long-Term Assets - EXCEL TEMPLATE

GB 518 Unit 04 Assignment - Unit 4 - Reporting and Analyzing Receivables and Long-Term Assets - EXCEL TEMPLATE

P7-4A  Carmack Company has credit sales of $2.6 million for year 2011. On December 31, 2011, the company's Allowance for Doubtful Accounts has an unadjusted credit balance of $13,400. Carmack prepares a scheduled of its December 31, 2011 accounts receivable by age. On the basis of past experience, it estimates the percent of receivables in each age category that will become uncollectible. The information is summarized here.

Part 1 Estimate the required balance of the Allowance for Doubtful Accounts at December 31, 2011, using the aging accounts receivables method.

Part 2 Prepare the adjusting entry to record bad debts expense at December 31, 2001.

Part 3 On June 30, 2012, Carmack Company concludes that a customer's $3750 receivable (created in 2011) is uncollectible and that the account should be written off. What effect will this action have on Carmack's 2012 net income? Explain.

P08-01-A Xavier Construction negotiates a lump-sum purchase of several assets from a company that is going out of business. The purchase is completed on January 1, 2011, at a total cash price of $787,500 for a building, land, land improvements, and four vehicles. The estimated market values of the assets are building, $408,00; land, $289,00; land improvements, $42,500; and four vehicles, $110,500. The company's fiscal year ends December 31.

Part 1 Prepare a table to allocate the lump-sum purchase price to the separate assets purchased (round percents to nearest 1%). Prepare the jounal entry to record the purchase. accounts receivables method.

Part 2  Compute the depreciation expense for year 2011 on the building using the straight-line method, assuming a 15 year life and a $25,650 salvage value.

Part 3 Compute the depreciation expense for year 2011 on the land improvements assuming a 5 year life and double-declining-balance depreciation.

Part 4  Defend or refute this statement: Accelerated depreciation results in payment of less taxes over the asset's life.

 

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GB518 unit 5 assignment - E9-4 E10-1 E10-16 E11-2 E11-15 GB518 unit 5 assignment EXCEL TEMPLATE

GB518 unit 5 assignment - Reporting and analyzing current liabilities AND  Accounting for corporations.

E9-4 E10-1 E10-16 E11-2 E11-15 GB518 unit 5 assignment - EXCEL TEMPLATE

E9-4 Perfect Systems borrows $94,000 cash on May 15, 2011, by signing a 60-day, 12% note.

1. On what date does this note mature?

2. Suppose the face value of the note equals $94,000, the principal of the loan.  Prepare the journal entries to record (a) issuance of the note and (b) payment of the note at maturity.

E10-1 On January 1, 2011, Kidman Enterprises issues bonds that have a $1,700,00 par value, mature in 20 years, and pay 9% interest semiannually on June 30 and December 31.  The bonds are sold at par.

1. How much interest will Kidman pay (in cash) to the bondholders every six months?

2. Prepare journal entries to record (a) the issuance of bonds on january 1, 2011 (b) the first interest payment in June 30, 2011 and (c ) the second interest payment on december 31, 2011.

3. Prepare the journal entry for issuance assuming the bonds are issued at (2) 98 and (b) 102.

E10-16 Ramirez Compnay is considering a project that will require a $500,000 loan.  It presently has total liabilities of $220,000 and total assets of $620,000.

1. Compute Ramirez's (a) present debt-to-equity ratio and (b) the debt-to-equity ration assuming it borrows $500,000 to fund the project.

2. Evaluate and discuss the level of risk involved if Ramirez borrows the funds to pursue the project.

E11-2 Aloha Corporation issues 6,000 shares of its common stock for $144,000 cash on february 20.  Prepare journal entries to record this event under each of the following separate situations.

1. The stock has neither par nor stated value.

2. The stock has a $20 par value.

3. The stock has an $8 stated value.

E11-15 Compute the price-earnings ration for each of these four separate companies.  Which stock might an analyst likely investigate as being potentially undervalued by the market?  Explain.

Company	Earnings per Share	Market Value per Share
1	$                  10.00	$            166.60
2	$                    9.00	$               90.00
3	$                    6.50	$               84.50
4	$                  40.00	$            240.00

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E9-6 E9-11 P9-1A P9-5A Week 5 Assignment Template

E9-6 E9-11 P9-1A P9-5A Week 5 Assignment Template
Week 5 Assignment Template - Accounting

E9-6 Use incremental analysis for make-or-buy decision.E9-6  SY Telc has recently started the manufacture of RecRobo, a three-wheeled robot that can scan a home for fires and gas leaks and then transmit this information to a mobile phone. The cost structure to manufacture 20,000 RecRobo’s is as follows.

                                                            Cost  
Direct materials ($40 per robot)     $ 800,000
Direct labor ($30 per robot)               600,000
Variable overhead ($6 per robot)      120,000
Allocated fixed overhead ($25 per robot)   500,000
  Total $2,020,000

SY Telc is approached by Chen Inc. which offers to make RecRobo for $90 per unit or $1,800,000.
Instructions
(a) Using incremental analysis, determine whether SY Telc should accept this offer under each of the following independent assumptions.
(1) Assume that $300,000 of the fixed overhead cost can be reduced (avoided).
(2) Assume that none of the fixed overhead can be reduced (avoided). However, if the robots are purchased from Chen Inc., SY Telc can use the released productive resources to generate additional income of $300,000.
(b) Describe the qualitative factors that might affect the decision to purchase the robots from an outside supplier.

E9-11 Use incremental analysis for retaining or replacing equipment decision.
E9-11 Twyla Enterprises uses a computer to handle its sales invoices. Lately, business has been so good that it takes an extra 3 hours per night, plus every third Saturday, to keep up with the volume of sales invoices. Management is considering updating its computer with a faster model that would eliminate all of the overtime processing.

                                                             Current Machine     New Machine
Original purchase cost                          $15,000                   $25,000
Accumulated depreciation                    $ 6,000                        —
Estimated annual operating costs         $24,000                   $18,000
Useful life                                             5 years                    5 years
If sold now, the current machine would have a salvage value of $5,000. If operated for the remainder of its useful life, the current machine would have zero salvage value. The new machine is expected to have zero salvage value after five years.
Instructions
Should the current machine be replaced?

P9-1A Make incremental analysis for special order and identify nonfinancial factors in the decision.
Pro Sports Inc. manufactures basketballs for the National Basketball Association (NBA). For the first 6 months of 2008, the company reported the following operating results while operating at 90% of plant capacity and producing 112,500 units.
                                                               Amount 
Sales                                                      $4,500,000
Cost of goods sold                                3,600,000
Selling and administrative expenses     450,000
Net income                                           $  450,000

Fixed costs for the period were: cost of goods sold $1,080,000, and selling and administrative expenses $225,000.

In July, normally a slack manufacturing month, Pro Sports receives a special order for 10,000 basketballs at $28 each from the Italian Basketball Association (IBA). Acceptance of the order would increase variable selling and administrative expenses $0.50 per unit because of shipping costs but would not increase fixed costs and expenses.

Instructions
NI increase $31,000

Prepare an incremental analysis for the special order.
Should Pro Sports Inc. accept the special order? Explain your answer.
What is the minimum selling price on the special order to produce net income of $4.10 per ball?
What nonfinancial factors should management consider in making its decision?

P9-5A Compute contribution margin and prepare incremental analysis concerning elimination of divisions.Lewis Manufacturing Company has four operating divisions. During the first quarter of 2008, the company reported aggregate income from operations of $176,000 and the following divisional results.
  Division
________________________________________
      I        II      III     IV 
Sales $250,000 $200,000 $500,000 $400,000
Cost of goods sold  200,000  189,000  300,000  250,000
Selling and administrative expenses   65,000   60,000   60,000   50,000
Income (loss) from operations $(15,000)  $(49,000)  $140,000  $100,000

Analysis reveals the following percentages of variable costs in each division.
   I   II   III   IV
Cost of goods sold 70% 90% 80% 75%
Selling and administrative expenses 40  70  50  60
Discontinuance of any division would save 50% of the fixed costs and expenses for that division.
Top management is very concerned about the unprofitable divisions (I and II). Consensus is that one or both of the divisions should be discontinued.

Instructions
(a) Compute the contribution margin for Divisions I and II.
(a) I $84,000
(b) Prepare an incremental analysis concerning the possible discontinuance of (1) Division I and (2) Division II. What course of action do you recommend for each division?
(c) Prepare a columnar condensed income statement for Lewis Manufacturing, assuming Division II is eliminated. Use the CVP format. Division II’s unavoidable fixed costs are allocated equally to the continuing divisions.
(c) Income III $133,850
(d) Reconcile the total income from operations ($176,000) with the total income from operations without Division II.
SOLUTION PREVIEW

EXERCISE 9-6

(a) (1)

	Decision
			Net Income
	Make	Buy	Increase
			(Decrease)
Direct materials	$800,000	0	$800,000
Direct labor	600,000	0	600,000
Variable overhead	120,000	0	120,000

 

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