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P12-4A Galley Corporation ----- P13-4A McCord Corporation ------- GB518 unit 6

 
P12-4A Galley Corporation
P13-4A McCord Corporation
 
GB518 unit 6
 
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 companyĆ¢€™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 ............................            201,000   
 
Additional 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
GALLEY CORPORATION
Statement of Cash Flows
For Year Ended December 31, 2011
 
Cash flows from operating activities:
 
 
   Net income
$201,000
                       
   Adjustment to reconcile net income to net
 
 
     Cash provided by operating activities
 
 
     Increase in accounts receivable
(12,000)
 
 
File name: gb518 unit 6.xls  File type: .xls  PRICE: $15