ACC557 Week 10 E14-3 E14-4 E14-13 P14-6A

ACC557 Week 10 E14-3 E14-4 E14-13 P14-6A

E14-3 The comparative condensed balance sheets of Garcia Corporation are presented below. 

Garcia Corporation

Comparative condensed Balance Sheets

December 31

Assets	2014	2013
Current assets	$76,000	$80,000
Property, plant, and equipment(net)	100,000	90,000
Intangibles	24,000	40,000
Total assets	$200,000	$210,000
Liabilities and stockholders’ equity
Current liabilities	$40,000	$48,000
Long-term liabilities	140,000	150,000
Stockholders equity	20,000	12,000
Total liabilities and stockholders’ equity	$200,000	$210,000

Instructions
(a) Prepare a horizontal analysis of the balance sheet data for Garcia Corporation using 2013 as a base.
(b) Prepare a vertical analysis of the balance sheet data for Garcia Corporation in columnar form for 2014.

E14-4 The comparative condensed income statements of Hendi Corporation are shown below.

Hendi Corporation

Comparative Condensed income Statements

For the years Ended December 31

	2014	2013
Net sales	$600,000	$500,000
Cost of goods sold	468,000	400,000
Gross profit	132,000	100,000
Operating expenses	60,000	54,000
Net income $72,000	$72,000	$46,000

Instructions
(a) Prepare a horizontal analysis of the income statement data for Hendi Corporation using 2013 as a base. (Show the amounts of increase or decrease.)

(b) Prepare a vertical analysis of the income statement data for Hendi Corporation in columnar form for both years.

E14-13 Maulder Corporation has income from continuing operations of $290,000 for the year ended December 31, 2014. It also has the following items (before considering income taxes).
1. An extraordinary loss of $70,000.

2. A gain of $35,000 on the discontinuance of a division.
3. A correction of an error in last year’s financial statements that resulted in a $25,000 understatement of 2013 net income.
Assume all items are subject to income taxes at a 30% tax rate.

Instructions
(a) Prepare an income statement, beginning with income from continuing operations.

(b) Indicate the statement presentation of any item not included in (a) above.

P14-6 The comparative statements of Beulah Company are presented below.

Liabilities and Stockholders’ Equity

Current liabilities
Accounts payable	$122,000	$110,000
Income taxes payable	12,000	11,000
Total current liabilities	134, 000	121,000
Long term liabilities
Bonds payable	120,000	80,000
Total liabilities	254,000	201,000
Stockholders’ equity
Common stock($5 par)	150,000	150,000

and so on….

Additional data:
The common stock recently sold at $19.50 per share.

Instructions
Compute the following ratios for 2014.
(a) Current.                                          (h) Return on common stockholders’ equity.
(b) Acid-test.                                        (i) Earnings per share.
(c) Accounts receivable turnover.        (j) Price-earnings.
(d) Inventory turnover.                                    (k) Payout.
(e) Profit margin.                                 (l) Debt to total assets.
(f) Asset turnover.                               (m) Times interest earned.
(g) Return on assets.

 

TUTORIAL PREVIEW
(a)

GARCIA CORPORATION
Condensed Income Statements
For the Years Ended December 31
			Increase or (Decrease)
			During 2013
	2014	2013	Amount	Percentage
Assets
Current assets	$       76,000	$         80,000	$  (4,000.00)	(5.0%)
Property, plant & equipment (net)	$     100,000	$         90,000	$    10,000.00	11.1%

 

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