Question
Brief Exercise 18-2
Schellhammer Corporation reported the following amounts in 2013, 2014, and 2015.
| | | 2013 | | 2014 | | 2015 |
Current assets | | $200,000 | | | $210,000 | | | $240,000 | |
Current liabilities | | $150,000 | | | $168,000 | | | $184,000 | |
Total assets | | $500,000 | | | $600,000 | | | $620,000 | |
(b)
Perform each of the three types of analysis on Schellhammer’s current assets.(Round percentages to 0 decimal places, e.g. 43% and ratios to 2 decimal places, e.g.1.58.)
| | | 2013 | | 2014 | | 2015 |
Horizontal Analysis | | | | | | | | | |
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Vertical Analysis | | | | | | | | | |
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Ratio Analysis | | | | | | | | | |
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Brief Exercise 18-3
Using the following data from the comparative balance sheet of Goody Company.
| | | December 31, 2015 | | December 31, 2014 |
Accounts receivable | | $520,000 | | | $400,000 | |
Inventory | | $840,000 | | | $600,000 | |
Total assets | | $3,000,000 | | | $2,500,000 | |
Illustrate horizontal analysis.(Round percentages to 0 decimal places, e.g. 12%.)
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Goody Company
Balance Sheet | | December 31, 2015 | | December 31, 2014 | | | Amount | | Percentage |
Accounts receivable | | $520,000 | | | $400,000 | | | | $http://edugen.wiley.com/edugen/art2/common/pixel.gif [removed] | | http://edugen.wiley.com/edugen/art2/common/pixel.gif [removed]
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Inventory | | $840,000 | | | $600,000 | | | | $http://edugen.wiley.com/edugen/art2/common/pixel.gif [removed] | | http://edugen.wiley.com/edugen/art2/common/pixel.gif [removed]
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Total assets | | $3,000,000 | | | $2,500,000 | | | | $http://edugen.wiley.com/edugen/art2/common/pixel.gif [removed] | | http://edugen.wiley.com/edugen/art2/common/pixel.gif [removed]
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Brief Exercise 18-8
Vertical analysis (common size) percentages for Kochheim Company’s sales, cost of goods sold, and expenses are shown below.
Vertical Analysis | | 2015 | | 2014 | | 2013 |
Sales | | 100.0 | | 100.0 | | 100.0 |
Cost of goods sold | | 60.2 | | 62.4 | | 63.5 |
Expenses | | 25.0 | | 25.6 | | 27.5 |
(a) Calculate net income.
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(b) Did Kochheim’s net income as a percent of sales increase, decrease, or remain unchanged over the 3-year period?
Brief Exercise 18-11 (Part Level Submission)The following data are taken from the financial statements of Rainsberger Company. | | | 2015 | | 2014 | Accounts receivable (net), end of year | | $550,000 | | $520,000 | Net sales on account | | 3,960,000 | | 3,100,000 | Terms for all sales are 1/10, n/60. | | | | | | |
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Compute for each year the accounts receivable turnover. At the end of 2013, accounts receivable (net) was $480,000.(Round answers to 1 decimal place, e.g. 1.6.) | | | 2015 | | 2014 | Accounts receivable turnover | | http://edugen.wiley.com/edugen/art2/common/pixel.gif [removed]times
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Compute for each year the average collection period. At the end of 2013, accounts receivable (net) was $480,000.(Round answers to 1 decimal place, e.g. 1.6.)
| | | 2015 | | 2014 |
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Brief Exercise 18-12 (Part Level Submission)The following data are from the income statements of Haskin Company. | | | 2015 | | 2014 | Sales | | $6,420,000 | | | $6,240,000 | | Beginning inventory | | 940,000 | | | 860,000 | | Purchases | | 4,340,000 | | | 4,661,000 | | Ending inventory | | 1,020,000 | | | 940,000 | | | |
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Compute for each year the inventory turnover.(Round answers to 1 decimal place, e.g. 1.6.) | | | 2015 | | 2014 | Inventory turnover | | http://edugen.wiley.com/edugen/art2/common/pixel.gif [removed]times
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Compute for each year the average days to sell the inventory.(Round answers to 1 decimal place, e.g. 1.6.)
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Brief Exercise 18-13
Guo Company has owners’ equity of $400,000 and net income of $66,000. It has a payout ratio of 20% and a return on assets of 15%.
How much did Guo pay in cash dividends, and what were its average assets?(Round answers to 0 decimal places, e.g. 125.)
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Exercise 18-2
Operating data for Navarro Corporation are presented below.
| | | 2015 | | 2014 |
Net sales | | $750,000 | | $600,000 |
Cost of goods sold | | 465,000 | | 390,000 |
Selling expenses | | 105,000 | | 66,000 |
Administrative expenses | | 60,000 | | 54,000 |
Income tax expense | | 36,000 | | 27,000 |
Net income | | 84,000 | | 63,000 |
Prepare a schedule showing a vertical analysis for 2015 and 2014.(Round answers to 1 decimal place, e.g. 48.5%.)
NAVARRO CORPORATION
Condensed Income Statements
For the Years Ended December 31 |
| | 2015 | | 2014 |
| | Amount | | Percent | | Amount | | Percent |
Net sales | $750,000 | | http://edugen.wiley.com/edugen/art2/common/pixel.gif [removed]%
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Cost of goods sold | 465,000 | | http://edugen.wiley.com/edugen/art2/common/pixel.gif [removed]%
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Gross profit | 285,000 | | http://edugen.wiley.com/edugen/art2/common/pixel.gif [removed]%
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Selling expenses | 105,000 | | http://edugen.wiley.com/edugen/art2/common/pixel.gif [removed]%
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Administrative expenses | 60,000 | | http://edugen.wiley.com/edugen/art2/common/pixel.gif [removed]%
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Total operating expenses | 165,000 | | http://edugen.wiley.com/edugen/art2/common/pixel.gif [removed]%
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Income before income taxes | 120,000 | | http://edugen.wiley.com/edugen/art2/common/pixel.gif [removed]%
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Income taxes expense | 36,000 | | http://edugen.wiley.com/edugen/art2/common/pixel.gif [removed]%
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Net income | $84,000 | | http://edugen.wiley.com/edugen/art2/common/pixel.gif [removed]%
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Exercise 18-5
SupposeNordstrom, Inc., which operates department stores in numerous states, has the following selected financial statement data for the year ending January 30, 2014.
NORDSTORM, INC.
Balance Sheet (partial) |
(in millions) | | End-of-Year | | Beginning-of-Year |
Cash and cash equivalents | | | $ 795 | | | | $ 72 | |
Accounts receivable (net) | | | 2,035 | | | | 1,942 | |
Inventory | | | 898 | | | | 900 | |
Prepaid expenses | | | 88 | | | | 93 | |
Other current assets | | | 238 | | | | 210 | |
Total current assets | | | $4,054 | | | | $3,217 | |
Total current liabilities | | | $2,014 | | | | $1,601 | |
For the year, net sales were $8,258 and cost of goods sold was $5,328 (in millions).
(a)
Compute the four liquidity ratios at the end of the year.(Round answers to 1 decimal place, e.g. 1.6 .)