GB518
unit 6
P12-4A
Galley Corporation
P13-4A
McCord Corporation
P12-04A
Galley Corp., a merchandiser, recently completed its 2011
operations. For the year, (1) all sales are credit sales, (2) all credits to
Accounts Receivable reflect cash receipts from customers, (3) all purchases of
inventory are on credit, (4) all debits to Accounts Payable reflect cash
payments for inventory, (5) Other Expenses are all cash expenses, and (6) any
change in Income Taxes Payable reflects the accrual and cash payment of taxes.
The company’s balance sheets and income statement follow.
Galley
Corporation
Comparative
Balance Sheet
December 31,
2011 and 2010
Assets
2011
2010 Cash.....................................
174,000 117,000 Accts Rec. ...........................
93,000 81,000 Merch Rec.
.......................... 609,000 534,000 Equipment
.......................... 333,000
297,000 Accum. Depreciation-Eqip. .... (156,000) (102,000) Total
Assets ........................ 1,053,000
927,000
Liabilities
& Equity
Accts
Payable ....................... 69,000
96,000 Income taxes payable ............ 27,000 24,000 Common
Stock, $2 par value .. 582,000 558,000 Paid-in
Capital in excess of par value, common stock 198,000
162,000 Retained earnings ..................
177,000 87,000 Total Liabilities and Equity
....... 1,053,000 927,000
Galley
Corporation
Income
Statement
For the Year
ended December 31, 2011
Sales
.....................................
1,992,000
Cost of
goods ......................... 1,194,000
Gross Profit
............................ 798,000
Operating
Expenses:
Depreciation
Exp. ............... 54,000
Other
Expenses .................. 501,000 555,000
Income
Before Taxes ............... 243,000
Income Tax
Expenses .............. 42,000
Net Income
............................ 201,00
Addiional
Information on Year 2011 Transactions:
a) Purchased
equipment for $36,000 cash.
b) Issued
12,000 shares of common stock for $5 cash per share.
c) Declared
and paid $111,000 in cash dividends.
Required:
Prepare a
complete statement of cash flows; report its cash inflows and cash outflows
from operating activities according to the indirect method.
P13-04A
Selected year-end financial statements of McCord
Corporation follow. (Note: All sales are on credit; selected balance
sheet amounts at December 31, 2010, were inventory, $32,400; total assets,
$182,400; common stock, $90,000; and retained earnings, $31,300.)
McCORD
CORPORATION
Income
Statement
For Year
Ended December 31, 2011
Sales
$ 348,600 Cost of goods sold
229,150 Gross
profit 119,450 Operating expenses
52,500 Interest expense
3,100 Income
before taxes 63,850 Income taxes
15,800 Net
income $
48,050
McCORD
CORPORATION
Balance
Sheet
December 31,
2011
Assets
Cash
$ 9,000 Short-term
investments 7,400 Accounts
receivable, net 28,200 Notes
receivable (trade)* 3,500
Merchandise inventory 31,150 Prepaid
expenses
1,650 Plant assets, net
152,300 Total assets $
233,200
Liabilities
and Equity
Accounts
payable $16,500 Accrued
wages payable
2,200 Income taxes payable 2,300 Long-term note
payable, secured by mortgage on plant assets
62,400 Common stock 90,000 Retained earnings
59,800 Total
liabilities and equity $
233,200
Required:
Compute the
following :
(1)
Current ratio
(2)
Acid-test ratio
(3)
Days' sales uncollected
(4)
Inventory turnover
(5)
Days' sales in inventory
(6)
Debt-to-equity ratio
(7)
Times interest earned
(8)
Profit margin ratio
(9)
Total asset turnover
(10)
Return on total assets
(11)
Return on common stockholders' equity
TUTORIAL
PREVIEW
GB518
unit 6
P12-4A
Galley Corporation
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GALLEY CORPORATION
Statement of Cash Flows
For Year Ended December 31, 2011
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Cash flows from operating activities:
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Net income
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$201,000
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Adjustment
to reconcile net income to net
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Cash provided
by operating activities
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Increase
in accounts receivable
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(12,000)
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