P13‑2A
The comparative statements of Lucille Company are presented here.
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LUCILLE COMPANY
Income Statements
For the Years Ended December 31
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2012
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2011
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Net
sales
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$1,890,540
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$1,750,500
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Cost
of goods sold
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1,058,540
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1,006,000
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Gross
profit
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832,000
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744,500
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Selling
and administrative expenses
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500,000
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479,000
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Income
from operations
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332,000
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265,500
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Other
expenses and losses Interest expense
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22,000
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20,000
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Income
before income taxes
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310,000
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245,500
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Income
tax expense
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92,000
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73,000
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Net
income
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$ 218,000
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$ 172,500
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Compute ratios from balance sheets and income statements. (SO 6), AP
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LUCILLE COMPANY
Balance Sheets
December 31
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Assets
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2012
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2011
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Current
assets
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Cash
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$ 60,100
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$ 64,200
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Short-term
investments
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74,000
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50,000
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Accounts
receivable
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117,800
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102,800
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Inventory
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126,000
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115,500
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Total
current assets
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377,900
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332,500
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Plant
assets (net)
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649,000
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520,300
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Total
assets
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$1,026,900
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$852,800
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Liabilities and Stockholders’ Equity
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Current
liabilities
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Accounts
payable
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$ 160,000
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$145,400
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Income
taxes payable
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43,500
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42,000
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Total
current liabilities
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203,500
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187,400
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Bonds
payable
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220,000
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200,000
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Total
liabilities
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423,500
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387,400
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Stockholders’
equity
|
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Common
stock ($5 par)
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290,000
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300,000
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Retained
earnings
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313,400
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165,400
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Total
stockholders’ equity
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603,400
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465,400
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Total
liabilities and stockholders’ equity
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$1,026,900
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$852,800
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All
sales were on account. Net cash provided by operating activities for 2012 was
$220,000. Capital expenditures were $136,000, and cash dividends were $70,000.
Instructions
Compute
the following ratios for 2012.
1.
Earnings per share.
2.
Return on common stockholders’ equity.
3.
Return on assets.
4.
Current ratio.
5.
Receivables turnover.
6.
Average collection period.
7.
Inventory turnover.
8.
Days in inventory.
9.
Times interest earned.
10.
Asset turnover.
11.
Debt to total assets.
12.
Current cash debt coverage.
13.
Cash debt coverage.
14.
Free cash flow.
TUTORIAL PREVIEW
(a) Earnings per share
= Net Income/ Average no. of common shares
No. of shares in
2011 = $300,000/ $5 = 60,000
shares
2012 = $290,000/ $5 = 58,000
shares
Average no. of shares =
(60,000 + 58,000)/ 2
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