Garrison - Chapter 16 “How Well Well Am I Doing?”--Financial Statement Analsis !ssa "#estions
173. Espinola Corporation's most recent balance sheet and income statement appear below: Statement of Financial Position December 31, ear ! and ear 1 "in tho#sands of dollars$ ear ! %ssets C#rrent assets: Cash Cash.. ..... ..... .... .... ..... ..... .... .... .... ..... ..... .... .... ..... ..... .... .... ..... ..... .... .... ..... ...... ...... ...... ...... ...... ... %cco#nts recei)able.......................................... +n)e n)entor or... ............. ............ ............ ........ ...... .... .... ........ ...... .... .... ........ ...... Prep Prepai aid d e-pe e-pens nses es.. .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... otal c#r c#rrent assets.......... ............. ......... ...... ....... ...... .... .... ........ ...... .... Plan Plantt and and e0#i e0#ipm pment ent,, net. net... .... ..... ..... .... ..... ...... ...... ...... ...... ...... ...... ...... ..... .. otal o tal assets assets... ....... ....... ...... ....... ....... ...... ....... ....... ....... ....... ...... ....... ....... ...... ....... ........ ...... .. iabilities and Stoc4holders5 E0#it C#rrent liabilities: %cco %cco#nt #ntss paabl paable.. e.... .... ..... ..... .... .... ..... ...... ...... ...... ...... ...... ...... ...... ...... ...... ..... %ccr#ed liabilities.............................................. 6otes paable, short term.............................. .... otal c#r c#rrent li liabilities.......... ............ ............ .............. ...... .... ond ondss pa paable able.. .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .. otal otal liab liabil ilit itie ies. s... ..... ..... .... .... ..... ..... .... .... ..... ..... .... .... ..... ..... .... ..... ...... ...... ...... ...... ..... .. Stoc4holders5 e0#it: Preferred st stoc4, &1 &1 pa par )a )al#e, /8 /8.................. Common stoc4, &1 par )al#e............................. %dditional pa paid9in ca capitalcommon ssttoc4. . . . . . . . ;eta ;etain ined ed earn earnin in
Garrison/Noreen/Brewer, Managerial Accounting, Twelfth Edition
ear 1
& 3! & 1( ! ! !* 1* 1* 13 ! ! 7 7 /7 ( 2! &1,/ &1,/ &1,*2 &1,*2
& ! & 17 ( ( * * 3! 3! !2 !1 !1 !! !! /3 /1 1 1 1 1 1 / 1/ ( 3 1,3 1,3 2( &1,/ &1,/ &1,* &1,*2 2
16-5
+ncome Statement For the ear Ended December 31, ear ! "in tho#sands of dollars$ Sales Sales "all on acco#nt acco#nt$.. $...... ....... ...... ....... ....... ....... ....... ...... ....... ....... ...... ....... ...... &1,!! &1,!! Cost Cost of ros >rosss mar< marros >rosss mar mar
16-6
Garrison/Noreen/Brewer, Managerial Accounting, Twelfth Edition
%ns: a. >ross marross mar
Garrison/Noreen/Brewer, Managerial Accounting, Twelfth Edition
16-7
@. C#rrent ratio A C#rrent assets B C#rrent C#rrent liabilities A &7 B &3! A !.12 4. %cid9test ratio ratio A K#ic4 assets B C#rrent liabilities A &/* B &3! &3 ! A 1.2 K#ic4 assets A Cash Gar4etable sec#rities %cco#nts recei)able Short9 term notes recei)able A &3! & &!! A &/* l. %cco#nts recei)able t#rno)er A Sales on acco#nt B %)era
16-
%+CP% %+CP% F6: ;eportin< ;eportin<
Garrison/Noreen/Brewer, Managerial Accounting, Twelfth Edition
17*. Sla#ba#
Garrison/Noreen/Brewer, Managerial Accounting, Twelfth Edition
& 1 & 1( ( ( ( ( 3! 3! 3* 7 1 32 ** ! ! ! ! 1 3 13 */ *1 2( 2( 2* 2* &1,37 &1,37 &1,3 &1,3( (
16-!
+ncome Statement For the ear Ended December 31, ear ! "in tho#sands of dollars$ Sales Sales "all "all on acco#nt$. acco#nt$..... ....... ...... ....... ....... ...... ....... ....... ........ .......... .......... ....... .. Cost Cost of ros >rosss mar< mar
&1,3/ &1,3/ (! /3 322 131 17 11* 3* & (
Di)idends on common stoc4 d#rin< ear ear ! totaled &! tho#sand. Di)idends on preferred stoc4 totaled &! tho#sand. he mar4et price of common stoc4 at the end of ear ear ! was &!.(( & !.(( per share. ;e0#ired: Comp#te the followin< for ear ear !: a. >ros >rosss mar marross marross mar
16-1"
Garrison/Noreen/Brewer, Managerial Accounting, Twelfth Edition
d. Di)idend pao#t ratio A Di)idends per share B Earnin
Garrison/Noreen/Brewer, Managerial Accounting, Twelfth Edition
%+CP% %+CP% F6: ;eportin< ;eportin<
16-11
17/. Philo Corporati Corporation's on's most recent recent income statement statement appears below: Sales Sales "all "all on acco# acco#nt$ nt$.... ....... ...... ....... ........ ......... .......... .......... ..... Cost Cost of ros >rosss mar< mar
&/1, &/1, 3!/, 3!/, !3, !3, 1, 1, 13, 3/, 3/, 2/, 3, 3, & /,
;e0#ired: Comp#te the ross marross mar
16-1#
%+CP% %+CP% F6: ;eportin< ;eportin<
Garrison/Noreen/Brewer, Managerial Accounting, Twelfth Edition
17. Financial Financial statements statements for Pratt Pratt Compan Compan appear below: Pratt Compan Statement of Financial Position December 31, ear ! and ear 1 "dollars in tho#sands$ ear ! C#rrent assets: Cash Cash and and mar4 mar4et etabl ablee sec# sec#ri riti ties es.. ..... ..... .... .... ..... ..... ..... ...... ...... ..... .. %cco#nts rec recei)able, net..................................... +n)e n)entor or... ............. ............ ............ ............ .............. .......... ...... .... .... Prep Prepai aid d e-pe e-pens nses es.. .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... otal c#r c#rrent ass assets.......... ............. ............ ............ ......... ...... .... .... 6onc#rrent assets: Plan Plantt = e0#i e0#ipm pmen ent, t, net... net..... .... .... ..... ...... ...... ...... ...... ...... ...... ...... ...... ...... ... otal o tal assets assets... ....... ....... ...... ....... ....... ...... ....... ....... ....... ....... ...... ....... ......... .......... .......... ....... .. C#rrent liabilities: %cco %cco#nt #ntss paabl paable.. e.... .... ..... ..... .... .... ..... ..... .... .... ..... ..... .... .... ..... ...... ...... ...... ...... ... %ccr#ed liabilities............................................... 6otes paable, short term.......................... term.................. ................ .......... otal c# c#rrent li liabilities.......... ............ ......... ...... .... .... .... ........ ...... .... .... 6onc#rrent liabilities: onds onds paabl paable.. e.... .... .... ..... ..... .... .... ..... ..... .... .... .... ..... ..... .... .... ..... ..... ..... ...... ...... ..... .. otal o tal liabil liabiliti ities. es.... ....... ....... ....... ....... ...... ....... ....... ...... ....... ....... ...... ....... ....... ....... ........ .... Stoc4holders5 e0#it: Preferred st stoc4, &/ &/ pa par, 18............................... Common st stoc4, &/ &/ pa par........................................ %dditional paid9in capitalcommon stoc4.......... ;eta ;etain ined ed earn earnin in
Garrison/Noreen/Brewer, Managerial Accounting, Twelfth Edition
ear 1
& 1* & 1* 1 2 1( 1/ 1/ 1/ 7 7 // // /* 1,*2 1,*2 1,*! 1,*! &!,* &!,* &1,2 &1,2
& 1 & 1 / !3 !/ ** ** *7 3 7*
3 77
1 ! 1! 1 ( 1( ! 1 !1 72 ( 1,3 1,3 1,12 1,12 &!,* &!,* &1,2 &1,2
16-1$
Pratt Compan +ncome Statement For the ear Ended December 31, ear ! "dollars in tho#sands$ Sales Sales "all "all on acco#nt$. acco#nt$..... ....... ...... ....... ....... ...... ....... ....... ........ .......... .......... ....... .. Cost Cost of ros >rosss mar< mar
&!, &!, 1,* 1,* !* 3 3 33 22 & !31
Di)idends d#rin< ear ear ! totaled &1!1 tho#sand, of which &1! tho#sand were preferred di)idends. he mar4et price of a share of common stoc4 on December 31, 3 1, ear ear ! was &(. ;e0#ired: Comp#te the followin< for ear ear !: a. Earnin Earnin
16-1%
Garrison/Noreen/Brewer, Managerial Accounting, Twelfth Edition
%ns: a. Earnin
Garrison/Noreen/Brewer, Managerial Accounting, Twelfth Edition
16-15
h. ?or4in< ?or4in< capital A C#rrent assets C#rrent liabilities A &// &/ / &** A &11 i. C#rrent ratio A C#rrent assets B C#rrent liabilities A &// B &** A 1.!/ @. %cid9test %cid9test ratio A K#ic4 assets B C#rrent liabilities liabilities A &33 B &** A .7/ K#ic4 assets A Cash Gar4etable sec#rities %cco#nts recei)able Short9 term notes recei)able A &1* &12 A &33 4. %cco#nts recei)able t#rno)er A Sales on acco#nt B %)era
16-16
%+CP% %+CP% F6: ;eportin< ;eportin<
Garrison/Noreen/Brewer, Managerial Accounting, Twelfth Edition
177. Financial Financial statements statements for Kadri Kadri Compan appear appear below: Kadri Compan Statement of Financial Position December 31, ear ! and ear 1 "dollars in tho#sands$ ear !
ear 1
C#rrent assets: Cash Cash and and mar4 mar4et etabl ablee sec# sec#ri riti ties es.. ..... ..... .... .... ..... ..... ..... ...... ...... ..... .. & 1! & 1 %cco#nt #nts recei) ei)able ble, net. et....... ............ .......... ....... ...... ........ ...... .... 13 13 1! +n)en n)enttor or.... ...... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... 1 1 1( 1( Prep Prepai aid d e-pen e-pense ses. s... .... ..... ..... .... .... ..... ..... .... .... ..... ..... .... .... ..... ..... .... ..... ...... ...... ..... / / otal c#r c#rrent rent ass assets ets.... ...... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... * * */ */ 6onc#rrent assets: Plan Plantt = e0#i e0#ipm pmen ent, t, net... net..... .... .... ..... ...... ...... ...... ...... ...... ...... ...... ...... ...... ... 1,73 1,73 1,73 1,73 otal o tal assets assets... ....... ....... ...... ....... ....... ...... ....... ....... ....... ....... ...... ....... ......... .......... .......... ....... .. &!,12 &!,12 &!,1( &!,1( C#rrent liabilities: %cco#nt %cco#ntss paable paable... ...... ....... ....... ....... ....... ...... ....... ....... ...... ....... ......... .......... ....... & / & 1 %ccr#ed liabilities............................................... / 6otes paable, short term.......................... term.................. ................ .......... 1 ! otal c#r c#rrent rent liabi iabili liti ties es.. .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... !7 !7 3/ 3/ 6onc#rrent liabilities: onds onds paabl paable... e...... ...... ....... ....... ....... ....... ...... ....... ....... ...... ....... ....... ........ .......... ..... !( 3 otal o tal liabil liabiliti ities. es.... ....... ....... ....... ....... ...... ....... ....... ...... ....... ....... ...... ....... ....... ....... ........ .... // / Stoc4holders5 e0#it: Preferred stoc4, &1 par, /8.... ............ ............. ...... .... .... ..... 1! 1! 1! Common stoc4 oc4, &1 par........ ............ .......... ....... ...... ........ ...... .... !! !! !! %dditional pa paid9in ca capitalcommon st stoc4.......... 11 11 ;etain ;etained ed earnin earnin
Garrison/Noreen/Brewer, Managerial Accounting, Twelfth Edition
16-17
Kadri Compan +ncome Statement For the ear Ended December 31, ear ! "dollars in tho#sands$ Sales "all on acco#nt$..... acco#nt$........... ............. .............. .................... .................... ....... &!,3 Cost of ros >rosss mar< mar
16-1
Garrison/Noreen/Brewer, Managerial Accounting, Twelfth Edition
c. Di)idend ield ratio A Di)idends per share B Gar4et price per share A &7.1* B &1/. A *.78 Di)idends per share A Common di)idends B Common shares A &1/7 B !! A &7.1* See abo)e d. ;et#rn on total assets A %d@#sted net income B %)era
Garrison/Noreen/Brewer, Managerial Accounting, Twelfth Edition
%+CP% %+CP% F6: ;eportin< ;eportin<
16-1!
17(. Garan)ille Corporation's most recent balance sheet and income statement statement appear below: Statement of Financial Position December 31, ear ! and ear 1 "in tho#sands of dollars$ ear ! ear 1 %ssets C#rrent assets: Cash Cash.. ..... ..... .... .... ..... ..... .... .... .... ..... ..... .... .... ..... ..... .... ..... ...... ...... ...... ...... ...... ...... ...... ...... ...... ... & 17 & 1( %cco#nt #nts recei) ei)able. ble............. ............ ............ ........ ...... .... .... ...... 1 1 1( +n)e n)entor or... ............. ............ ............ ............ .............. .......... ...... .... .... 17 17 1 Prep Prepai aid d e-pen e-pense ses. s... .... ..... ..... .... .... ..... ..... .... .... ..... ..... .... .... ..... ..... .... ..... ...... ...... ..... 7 otal c#r c#rrent ass assets.......... ............. ............ ............ ......... ...... .... .... /7 /7 /( Plan Plantt and and e0#i e0#ipm pment ent,, net. net... .... ..... ..... .... .... ..... ..... .... .... ..... ..... .... ..... ...... ...... ..... (* (3 otal o tal assets assets... ....... ....... ...... ....... ....... ...... ....... ....... ....... ....... ...... ....... ......... .......... .......... ....... .. &1,*1 &1,*1 &1,*1 &1,*1 iabilities and Stoc4holders5 E0#it C#rrent liabilities: %cco %cco#nt #ntss paabl paable.. e.... .... ..... ..... .... .... ..... ..... .... .... ..... ..... .... .... ..... ...... ...... ...... ...... ... %ccr#ed liabilities............................................... 6otes paable, short term.......................... term.................. ................ .......... otal c# c#rrent li liabilities.......... ............ ......... ...... .... .... .... ........ ...... .... .... onds paable........................................................ otal liab liabil iliities ties.. .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .. Stoc4holders5 e0#it: Preferred stoc4, &1 par )al#e, 18................. Common st stoc4, &! &! pa par )a )al#e.............................. %dditional paid9in capitalcommon stoc4.......... ;eta ;etain ined ed earn earnin in
16-#"
& 1/ & 1 * * / / !* !* !/ 2 1 33 33 3/ 3/ ! ! * * 1 * 1* 3* 3! 1,( 1,( 1, 1, &1,*1 &1,*1 &1,* &1,*1 1
Garrison/Noreen/Brewer, Managerial Accounting, Twelfth Edition
+ncome Statement For the ear Ended December 31, ear ! "in tho#sands of dollars$ Sales Sales "all "all on acco#nt$. acco#nt$..... ....... ...... ....... ....... ...... ....... ....... ........ .......... .......... ....... .. Cost Cost of ros >rosss mar< mar
&1,*1 &1,*1 ( // **2 11 1/ ( ! &
Di)idends on common stoc4 d#rin< ear ear ! totaled &! tho#sand. Di)idends on preferred stoc4 totaled &! tho#sand. he mar4et price of common stoc4 at the end of ear ear ! was &!.3 & !.3 per share. ;e0#ired: Comp#te the followin< for ear ear !: a. Earnin Earnin
Garrison/Noreen/Brewer, Managerial Accounting, Twelfth Edition
16-#1
c. Di)idend pao#t ratio A Di)idends per share B Earnin
16-##
%+CP% %+CP% F6: ;eportin< ;eportin<
Garrison/Noreen/Brewer, Managerial Accounting, Twelfth Edition
172. +sidro Corporation has pro)ided the followin< financial data "in tho#sands of dollars$:
otal assets otal assets... ....... ....... ...... ....... ....... ...... ....... ....... ....... ....... ...... ....... ......... .......... .......... ....... .. Stoc4holders5 e0#it: Preferred st stoc4, &1 par )a )al#e, #e, /8 /8..... ....... ...... ........ ...... .... Common stoc4 oc4, &! &! pa par )a )al#e... ........ ...... .... .... ........ ...... .... .... ........ .... %dditiona onal paid9i d9in capitalcommon stoc4... ....... ...... .... ;et ;etaine ained d ear earnin< nin
ear ! ear 1 &1,/! &1,/! &1,*2 &1,*2 &! ! &* * &1 1 &3( &3(
&! &* &1 &3! &3!
6et income for ear ear ! was &11 &11 tho#sand. +nterest e-pense was &!1 tho#sand. he tarate was 38. Di)idends on common stoc4 d#rin< ear ! totaled &* tho#sand. Di)idends on preferred stoc4 totaled &1 tho#sand. he mar4et price of common stoc4 at the end of ear ear ! was &2.1/ per share. ;e0#ired: Comp#te the followin< for ear ear !: a. Earnin Earnin
Garrison/Noreen/Brewer, Managerial Accounting, Twelfth Edition
16-#$
d. Di)idend ield ratio A Di)idends per share "see abo)e$ B Gar4et price per share A &.! B &2.1/ A !.128 e. ;et#rn on total assets A %d@#sted net income B %)era
%+CP% %+CP% F6: ;eportin< ;eportin<
1(. Gi4ola@cM4 Corporation's net income for the most recent ear ear was &1,372,. % total of 1, shares shares of common stoc4 stoc4 and !, shares shares of preferred stoc4 were o#tstandin< thro#
16-#%
%+CP% %+CP% F6: ;eportin< ;eportin<
Garrison/Noreen/Brewer, Managerial Accounting, Twelfth Edition
1(1. Ooa Corporation's net income last last ear was &7,*,. he di)idend on common common stoc4 was &(.* per share and the di)idend on preferred stoc4 was &*.3 per share. he mar4et price of common stoc4 at the end of the ear was &7(.2 per share. hro#
%+CP% %+CP% F6: ;eportin< ;eportin<
1(!. D#pas Corporation's net income last ear ear was &7,33,. he di)idend on common stoc4 was &1!.7 per share and the di)idend on preferred stoc4 was &1.7 per share. he mar4et price of common stoc4 at the end of the ear was &*7.! per share. hro#
Garrison/Noreen/Brewer, Managerial Accounting, Twelfth Edition
%+CP% %+CP% F6: ;eportin< ;eportin<
16-#5
1(3. ast ear, Sheline Corporation's di)idend on common stoc4 was &13. per share share and the di)idend on preferred stoc4 was &!.1 & !.1 per share. he mar4et price of common co mmon stoc4 at the end of the ear was &(. per share. ;e0#ired: Comp#te the di)idend ield ratio. Show o#r wor4N %ns: Di)idend ield ratio A Di)idends per share B Gar4et price per share A &13. B &(. A .12 %%CS: %naltic %naltic %+CP% %+CP% : Critical Critical hin4in< L: ! e)el: Eas
%+CP% %+CP% F6: ;eportin< ;eportin<
1(*. %llaman Corporation's Corporation's most recent income statement appears below: Sales Sales "all "all on acco# acco#nt$ nt$.... ....... ...... ....... ........ ......... .......... .......... ..... Cost Cost of ros >rosss mar< mar
&7, &7, */, */, 31, 31, 1, 1, !1, *, *, 17, /1, /1, &112,
he be
16-#6
Garrison/Noreen/Brewer, Managerial Accounting, Twelfth Edition
%ns: ;et#rn on total assets A %d@#sted net income B %)era
%+CP% %+CP% F6: ;eportin< ;eportin<
1(/. E-cerpts from Lrr Corporation's Corporation's most recent balance sheet appear below:
Pref Prefer erre red d stoc stoc4.. 4.... .... ..... ..... .... .... ..... ..... .... .... .... ..... ..... ..... ...... ...... ...... ...... ...... ...... ...... ... Com Commo mon n stoc stoc4. 4... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .. %dditional pa paid9in ca capitalcommon st stoc4............ ...... ;eta ;etain ined ed earni earnin< n
ear ! ear 1 & !, !, & !, !, *, *, *, *, 32, 32 , *!, *! , 3/, 3/, &1,*1, &1,*1, &1,3*, &1,3*,
6et income for ear ear ! was &1*7,. Di)idends on common stoc4 were &/, in total and di)idends on preferred stoc4 were &!7, in total. ;e0#ired: Comp#te the ret#rn on common stoc4holders' e0#it. Show o#r o#r wor4N %ns: ;et#rn on common stoc4holders' e0#it A "6et income Preferred di)idends$ B %)era
Garrison/Noreen/Brewer, Managerial Accounting, Twelfth Edition
%+CP% %+CP% F6: ;eportin< ;eportin<
16-#7
1(. Data from Speir Corporati Corporation's on's most recent recent balance sheet appear below: below: Prefer Preferred red stoc4.. stoc4..... ....... ....... ...... ....... ....... ...... ....... ....... ........ .......... .......... .......... ........ ... Commo Common n stoc stoc4.. 4.... .... ..... ..... .... .... ..... ..... .... .... .... ..... ..... ..... ...... ...... ...... ...... ...... ...... ...... ... %ddi %dditi tion onal al paid paid9i 9in n capi capita tal lco comm mmon on stoc stoc4. 4... .... .... .... ..... ..... ;etain ;etained ed earnin earnin
& !, !, 3, 3 , 3(, 3(, *2, *2, &1,37, &1,37,
% total of 1/, shares of common stoc4 and !, !, shares of preferred stoc4 were o#tstandin< at the end of the ear. ;e0#ired: Comp#te the boo4 )al#e per share. Show o#r wor4N %ns: oo4 )al#e per share A Common stoc4holders' e0#it B 6#mber of common shares o#tstandin< A &1,17, B 1/, shares A &7.( per share %%CS: %naltic %naltic %+CP% %+CP% : Critical Critical hin4in< L: ! e)el: Eas
16-#
%+CP% %+CP% F6: ;eportin< ;eportin<
Garrison/Noreen/Brewer, Managerial Accounting, Twelfth Edition
1(7. Financial Financial statements statements for ;aric4 ;aric4 Compan appear appear below: ;aric4 Compan Statement of Financial Position December 31, ear ! and ear 1 "dollars in tho#sands$ ear ! C#rrent assets: Cash Cash and and mar4 mar4et etabl ablee sec# sec#ri riti ties es.. ..... ..... .... .... ..... ..... ..... ...... ...... ..... .. %cco#nts rec recei)able, net..................................... +n)e n)entor or... ............. ............ ............ ............ .............. .......... ...... .... .... Prep Prepai aid d e-pen e-pense ses. s... .... ..... ..... .... .... ..... ..... .... .... ..... ..... .... .... ..... ..... .... ..... ...... ...... ..... otal c#r c#rrent ass assets.......... ............. ............ ............ ......... ...... .... .... 6onc#rrent assets: Plan Plantt = e0#i e0#ipm pmen ent, t, net... net..... .... .... ..... ...... ...... ...... ...... ...... ...... ...... ...... ...... ... otal o tal assets assets... ....... ....... ...... ....... ....... ...... ....... ....... ....... ....... ...... ....... ......... .......... .......... ....... .. C#rrent liabilities: %cco %cco#nt #ntss paabl paable.. e.... .... ..... ..... .... .... ..... ..... .... .... ..... ..... .... .... ..... ...... ...... ...... ...... ... %ccr#ed liabilities............................................... 6otes paable, short term.......................... term.................. ................ .......... otal c# c#rrent li liabilities.......... ............ ......... ...... .... .... .... ........ ...... .... .... 6onc#rrent liabilities: onds onds paabl paable.. e.... .... .... ..... ..... .... .... ..... ..... .... .... .... ..... ..... .... .... ..... ..... ..... ...... ...... ..... .. otal o tal liabil liabiliti ities. es.... ....... ....... ....... ....... ...... ....... ....... ...... ....... ....... ...... ....... ....... ....... ........ .... Stoc4holders5 e0#it: Preferred stoc4, &1 par, 18............................. Common st stoc4, &/ &/ pa par........................................ %dditional paid9in capitalcommon stoc4.......... ;eta ;etain ined ed earn earnin in
Garrison/Noreen/Brewer, Managerial Accounting, Twelfth Edition
ear 1
& 1! & 1! 1 ( 1/ 1 1 1 1 ! *1 *1 32 1,(3 1,(3 1,7( 1,7( &!,!* &!,!* &!,17 &!,17
& 13 & 1/ 3 / !7 !7 *3 *3 *7 31 7*
3 77
1 1 ! * !* ! / !/ 21 (1 1,/ 1,/ 1,* 1,* &!,!* &!,!* &!,1 &!,17 7
16-#!
;aric4 Compan +ncome Statement For the ear Ended December 31, ear ! "dollars in tho#sands$ Sales Sales "all "all on acco#nt$. acco#nt$..... ....... ...... ....... ....... ...... ....... ....... ........ .......... .......... ....... .. Cost Cost of ros >rosss mar< mar
&!,* &!,* 1,( 1,( 7! !( ** 3 *1 1!3 & !(7
;e0#ired: Comp#te the followin< for ear ear !: a. C#r C#rrent rent rat ratio. b. %cid9test ratio. c. %)era
16-$"
Garrison/Noreen/Brewer, Managerial Accounting, Twelfth Edition
d. +n)entor t#rno)er A Cost of
Garrison/Noreen/Brewer, Managerial Accounting, Twelfth Edition
%+CP% %+CP% F6: ;eportin< ;eportin<
16-$1
1((. Carleton Corporation's most recent balance sheet and income statement appear below: Statement of Financial Position December 31, ear ! and ear 1 "in tho#sands of dollars$ ear ! %ssets C#rrent assets: Cash Cash.. ..... ..... .... .... ..... ..... .... .... .... ..... ..... .... .... ..... ..... .... ..... ...... ...... ...... ...... ...... ...... ...... ...... ...... ... %cco#nt #nts recei) ei)able. ble............. ............ ............ ........ ...... .... .... ...... +n)e n)entor or... ............. ............ ............ ............ .............. .......... ...... .... .... Prep Prepai aid d e-pen e-pense ses. s... .... ..... ..... .... .... ..... ..... .... .... ..... ..... .... .... ..... ..... .... ..... ...... ...... ..... otal c#r c#rrent ass assets.......... ............. ............ ............ ......... ...... .... .... Plan Plantt and and e0#i e0#ipm pment ent,, net. net... .... ..... ..... .... .... ..... ..... .... .... ..... ..... .... ..... ...... ...... ..... otal o tal assets assets... ....... ....... ...... ....... ....... ...... ....... ....... ....... ....... ...... ....... ......... .......... .......... ....... .. iabilities and Stoc4holders5 E0#it C#rrent liabilities: %cco %cco#nt #ntss paabl paable.. e.... .... ..... ..... .... .... ..... ..... .... .... ..... ..... .... .... ..... ...... ...... ...... ...... ... %ccr#ed liabilities............................................... 6otes paable, short term.......................... term.................. ................ .......... otal c# c#rrent li liabilities.......... ............ ......... ...... .... .... .... ........ ...... .... .... onds onds paabl paable.. e.... ..... ..... .... .... ..... ..... .... .... ..... ..... .... .... ..... ..... .... .... .... ..... ...... ...... ...... ..... .. otal o tal liabil liabiliti ities. es.... ....... ....... ....... ....... ...... ....... ....... ...... ....... ....... ...... ....... ....... ....... ........ .... Stoc4holders5 e0#it: Preferred st stoc4, &1 par )al#e, /8................... Common st stoc4, &! &! pa par )a )al#e.............................. %dditional paid9in capitalcommon stoc4.......... ;eta ;etain ined ed earn earnin in
16-$#
ear 1
&
3 & 11 11 !1 !1 ! 12 12 17 7 7 / / 1 (1 7* &1,31 &1,31 &1,3/ &1,3/
& 1* & 1/ 3 3 * * !1 !1 !! 12 !* * * 1 1 * * 1 3 13 !( ! 21 (2 &1,31 &1,31 &1,3 &1,3/ /
Garrison/Noreen/Brewer, Managerial Accounting, Twelfth Edition
+ncome Statement For the ear Ended December 31, ear ! "in tho#sands of dollars$ Sales Sales "all "all on acco#nt$. acco#nt$..... ....... ...... ....... ....... ...... ....... ....... ........ .......... .......... ....... .. Cost Cost of ros >rosss mar< mar
&1,! &1,! 77 *2 * 2 ! * 12 & */
;e0#ired: Comp#te the followin< for ear ear !: a. ?or4in r4in< < cap capit ital al.. b. C#rrent ratio. c. %cid %cid9t 9tes estt rati ratio. o. d. %cco#nt %cco#ntss recei) recei)abl ablee t#rn t#rno)er o)er.. e. %)era
Garrison/Noreen/Brewer, Managerial Accounting, Twelfth Edition
16-$$
f. +n)entor t#rno)er A Cost of
%+CP% %+CP% F6: ;eportin< ;eportin<
1(2. E-cerpts from eat eat Corporation's most recent balance sheet "in tho#sands of dollars$ appear below: ear ! ear 1 C#rrent assets: Cash............................................ & 7 &1* %cco#nts recei)able.................... ! / !( +n)entor..................................... 1/ 1* Prepaid e-penses......................... ! ! otal c#r c#rrent assets.......... ............. ...... ...... &* 2 &/( C#rrent liabilities: %cco#nts paable........................ &1/ &17 %ccr#ed liabilities....................... 2 2 6otes paable, short term........ term..... ...... ... ( ( otal c#r c#rrent liabilities..... ...... .... .... ........ ...... .... & 3! &3* Sales on acco#nt d#rin< the ear totaled &1,3! tho#sand. Cost of
16-
%$Garrison/Noreen/Brewer, Managerial Accounting, Twelfth Edition
%ns: a. ?or4in< ?or4in< capital A C#rrent assets C#rrent liabilities A &*2 &*2 tho#sand &3! tho#sand A &17 tho#sand b. C#rrent ratio A C#rrent assets B C#rrent C#rrent liabilities A &*2 B &3! A 1./3 c. %cid9test ratio ratio A K#ic4 assets B C#rrent liabilities A &3! B &3! &3 ! A 1. K#ic4 assets A Cash Gar4etable sec#rities %cco#nts recei)able Short9 term notes recei)able A &7 & &!/ A &3! d. %cco#nts recei)able t#rno)er A Sales on acco#nt B %)era
%+CP% %+CP% F6: ;eportin< ;eportin<
12. ;omaine Corporation's total total c#rrent assets assets are &3,, its its nonc#rrent assets are &/7,, its total c#rrent liabilities are &!7,, its lon<9term liabilities are &3,, and its stoc4holders' e0#it is &!*,. ;e0#ired: Comp#te the compan's wor4in< capital. Show o#r wor4N %ns: ?or4in< ?or4in< capital A C#rrent assets C#rrent liabilities A &3, &!7, A &3, %%CS: %naltic %naltic %+CP% %+CP% : Critical Critical hin4in< L: 3 e)el: Eas
Garrison/Noreen/Brewer, Managerial Accounting, Twelfth Edition
%+CP% %+CP% F6: ;eportin< ;eportin<
16-$5
121. ?ament ?ament Corporation's total c#rrent assets assets are &31,, its its nonc#rrent assets assets are &(,, its total c#rrent liabilities are &!7,, its lon<9term liabilities are &*,, and its stoc4holders' e0#it is &!,. ;e0#ired: Comp#te the compan's c#rrent ratio. Show o#r wor4N %ns: C#rrent ratio A C#rrent assets B C#rrent liabilities A &31, B &!7, A 1.1/ %%CS: %naltic %naltic %+CP% %+CP% : Critical Critical hin4in< L: 3 e)el: Eas
%+CP% %+CP% F6: ;eportin< ;eportin<
12!. Data from F#rnia Corporation's most recent balance sheet appear below: Cash Cash.. .... .... .... ..... ..... .... .... ..... ..... .... .... ..... ..... .... ..... ... Gar4 Gar4et etab ablle sec#r sec#rit itiies.. es.... ..... ..... .. %cco %cco#n #nts ts rece receii)abl )ables es.. ..... ...... ..... +n)e +n)ent ntor or. ... .... .... .... .... .... .... .... .... .... .... .... .... .... Prep Prepai aid d e-pe e-pens nses es.. .... .... .... .... .... .... .... .. C#rre C#rrent nt liab liabil ilit itie ies.. s...... ........ ......... .....
&13, &13, &!1, &!1, &3!, &3!, &/!, &/!, &1, &1, &11( &11(, ,
;e0#ired: Comp#te the compan's acid9test ratio. Show o#r wor4N %ns: %cid9test ratio A K#ic4 assets B C#rrent liabilities A &, B &11(, A ./ K#ic4 assets A Cash Gar4etable sec#rities %cco#nts recei)able Short9term notes recei)able A &13, &!1, &3!, A &, %%CS: %naltic %naltic %+CP% %+CP% : Critical Critical hin4in< L: 3 e)el: Eas
16-$6
%+CP% %+CP% F6: ;eportin< ;eportin<
Garrison/Noreen/Brewer, Managerial Accounting, Twelfth Edition
123. CoMMolino CoMMolino Corporation Corporation has pro)ided pro)ided the followin< followin< data: data:
%cco %cco#n #nts ts rece receii)abl )able. e... .... .... .... .... .. +n)e +n)ent ntor or .... ...... .... .... .... .... .... .... .... .... .... .... .... .. Sale Saless on acco acco#n #nt. t... .... .... .... .... .... .... .... .. Cost Cost of of
his e hi ear as ast e ear &11 &11(, (, &1!3 &1!3, , &1*1 &1*1, , &1/ &1/, , &(7 &(7, , &*// &*//, ,
;e0#ired: Comp#te the acco#nts recei)able t#rno)er for this ear. Show o#r wor4N %ns: %cco#nts recei)able t#rno)er A Sales on acco#nt B %)era
%+CP% %+CP% F6: ;eportin< ;eportin<
12*. Data from ;in
%cco %cco#n #nts ts rece receii)abl )able. e... .... .... .... .... .. +n)e +n)ent ntor or .... ...... .... .... .... .... .... .... .... .... .... .... .... .. Sale Saless on acco acco#n #nt. t... .... .... .... .... .... .... .... .. Cost Cost of of
his e hi ear as ast e ear &11 &11(, (, &13 &13, , &1* &1*, , &173 &173, , &7!7 &7!7, , &*(1 &*(1, ,
;e0#ired: Comp#te the a)era
Garrison/Noreen/Brewer, Managerial Accounting, Twelfth Edition
16-$7
%ns: %)era
%+CP% %+CP% F6: ;eportin< ;eportin<
12/. Osieh Corporat Corporation ion has pro)ided pro)ided the followin< followin< data:
%cco %cco#n #nts ts rece receii)abl )able. e... .... .... .... .... .. +n)e +n)ent ntor or .... ...... .... .... .... .... .... .... .... .... .... .... .... .. Sale Saless on acco acco#n #nt. t... .... .... .... .... .... .... .... .. Cost Cost of of
his e hi ear as ast e ear &1* &1*, , &11 &11/, /, &1/ &1/, , &1/7 &1/7, , &(72 &(72, , &/7/ &/7/, ,
;e0#ired: Comp#te the in)entor t#rno)er for this ear: %ns: +n)entor t#rno)er A Cost of
16-$
%+CP% %+CP% F6: ;eportin< ;eportin<
Garrison/Noreen/Brewer, Managerial Accounting, Twelfth Edition
12. Data from #ttler Corporation's Corporation's most recent balance sheet and income statement statement appear below:
%cco %cco#n #nts ts rece receii)abl )able. e... .... .... .... .... .. +n)e +n)ent ntor or .... ...... .... .... .... .... .... .... .... .... .... .... .... .. Sale Saless on acco acco#n #nt. t... .... .... .... .... .... .... .... .. Cost Cost of of
his e hi ear as ast e ear &13* &13*, , &13( &13(, , &1/1 &1/1, , &171 &171, , &(* &(*, , &7/ &7/, ,
;e0#ired: Comp#te the a)era
Garrison/Noreen/Brewer, Managerial Accounting, Twelfth Edition
%+CP% %+CP% F6: ;eportin< ;eportin<
16-$!
127. Er4e Corporation's most recent balance sheet and income statement statement appear below: Statement of Financial Position December 31, ear ! and ear 1 "in tho#sands of dollars$ ear ! %ssets C#rrent assets: Cash Cash.. ..... ..... .... .... ..... ..... .... .... .... ..... ..... .... .... ..... ..... .... ..... ...... ...... ...... ...... ...... ...... ...... ...... ...... ... %cco#nt #nts recei) ei)able. ble............. ............ ............ ........ ...... .... .... ...... +n)e n)entor or... ............. ............ ............ ............ .............. .......... ...... .... .... Prep Prepai aid d e-pe e-pens nses es.. .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... .... otal c#r c#rrent ass assets.......... ............. ............ ............ ......... ...... .... .... Plan Plantt and and e0#i e0#ipm pment ent,, net. net... .... ..... ..... .... .... ..... ..... .... .... ..... ..... .... ..... ...... ...... ..... otal o tal assets assets... ....... ....... ...... ....... ....... ...... ....... ....... ....... ....... ...... ....... ......... .......... .......... ....... .. iabilities and Stoc4holders5 E0#it C#rrent liabilities: %cco %cco#nt #ntss paabl paable.. e.... .... ..... ..... .... .... ..... ..... .... .... ..... ..... .... .... ..... ...... ...... ...... ...... ... %ccr#ed liabilities............................................... 6otes paable, short term.......................... term.................. ................ .......... otal c# c#rrent li liabilities.......... ............ ......... ...... .... .... .... ........ ...... .... .... onds onds paabl paable.. e.... ..... ..... .... .... ..... ..... .... .... ..... ..... .... .... ..... ..... .... .... .... ..... ...... ...... ...... ..... .. otal otal liab liabil ilit itie ies. s... ..... ..... .... .... ..... ..... .... .... ..... ..... .... .... ..... ..... .... .... .... ..... ..... .... .... ..... ...... ... Stoc4holders5 e0#it: Preferred st stoc4, &1 par )al#e, /8................... Common st stoc4, &! &! pa par )a )al#e.............................. %dditional paid9in capitalcommon stoc4.......... ;eta ;etain ined ed earn earnin in
16-%"
ear 1
& 13 & 1 1! 1! 11 2 1 ! ! 3 32 (2 (* &1,!/ &1,!/ &1,!3 &1,!3
& 12 & 1( 7 * * 3 3 !( 13 1/ *3 *3 1 1 ! ! 1 3 13 32 37 (! ( &1,!/ &1,!/ &1,! &1,!3 3
Garrison/Noreen/Brewer, Managerial Accounting, Twelfth Edition
+ncome Statement For the ear Ended December 31, ear ! "in tho#sands of dollars$ Sales Sales "all "all on acco#nt acco#nt$.. $...... ....... ...... ....... ....... ....... ....... ....... ......... .......... .......... ..... Cost Cost of ros >rosss mar mar
&1,1/ &1,1/ 71 ** ** 3/( (! 1( * 12 & */
;e0#ired: Comp#te the followin< for ear ear !: a. ime imess int inter eres estt ear earne ned. d. b. Debt9to9e0#it ratio. %ns: a. imes interest earned A 6et operatin< income B +nterest e-pense A &(! B &1( A *./ b. Debt9to9e0#it ratio A iabilities B Stoc4holders' e0#it A &*3 B &(! A ./! %%CS: %naltic %naltic %+CP% %+CP% : Critical Critical hin4in< L: * e)el: Gedi#m
%+CP% %+CP% F6: ;eportin< ;eportin<
12(. Froemmin< Corporation's net operatin< income last last ear was &123, its interest interest e-pense was &!!, its total stoc4holders' e0#it was &2/, and its total liabilities were &*,. ;e0#ired: Comp#te the followin< for ear ear !: a. ime imess int inter eres estt ear earne ned. d. b. Debt9to9e0#it ratio.
Garrison/Noreen/Brewer, Managerial Accounting, Twelfth Edition
16-%1
%ns: a. imes interest earned A 6et operatin< income B +nterest e-pense A &123, B &!!, A (.77 b. Debt9to9e0#it ratio A iabilities B Stoc4holders' e0#it A &*, B &2/, A .*! %%CS: %naltic %naltic %+CP% %+CP% : Critical Critical hin4in< L: * e)el: Eas
%+CP% %+CP% F6: ;eportin< ;eportin<
122. rand Corporation has pro)ided the followin< data from its its most recent recent income statement: 6et operatin< income..................... income............... ...... +ntere +nterest st e-pens e-pense.. e..... ...... ....... ....... ....... ....... ....... ........ .... 6et income before ta-es................. +nco +ncome me ta-e ta-es. s... .... .... ..... ...... ...... ...... ...... ...... ...... ...... ...... ... 6et income.................................. income.......................... ........... ...
&/1, &37, &37, &1*, &*, &*, &1,
;e0#ired: Comp#te the times interest earned ratio. Show o#r wor4N %ns: imes interest earned A 6et operatin< income B +nterest e-pense A &/1, B &37, A 1.3( %%CS: %naltic %naltic %+CP% %+CP% : Critical Critical hin4in< L: * e)el: Eas
16-%#
%+CP% %+CP% F6: ;eportin< ;eportin<
Garrison/Noreen/Brewer, Managerial Accounting, Twelfth Edition
!. Golon Corporation has pro)ided the followin< followin< data from its most recent balance sheet: otal assets otal assets... ....... ....... ...... ....... ........ ......... .......... .......... ....... otal o tal liabil liabiliti ities. es.... ....... ....... ....... ....... ...... ....... ....... ....... .... otal o tal stoc4h stoc4hold olders ers55 e0#it e0#it..... .............. .........
&7*, &7*, &1, &1, &13, &13,
;e0#ired: Comp#te the debt9to9e0#it ratio. Show o#r wor4N %ns: Debt9to9e0#it ratio A iabilities B Stoc4holders' e0#it A &1, B &13, A *.2 %%CS: %naltic %naltic %+CP% %+CP% : Critical Critical hin4in< L: * e)el: Eas
Garrison/Noreen/Brewer, Managerial Accounting, Twelfth Edition
%+CP% %+CP% F6: ;eportin< ;eportin<
16-%$
