ACC 280 Week 5 Exercises(E15-1 Blevins Inc, E15-2 Gallup Corporation & E15-11 Scully Corporation’s)

Exercise 15-1 Financial information for Blevins Inc. is presented below.

December 31, 2009 December 31, 2008

Current assets $125,000 $100,000

Plant assets (net) 396,000 330,000

Current liabilities 91,000 70,000

Long-term liabilities 133,000 95,000

Common stock, $1 par 161,000 115,000

Retained earnings 136,000 150,000

Instructions

Prepare a schedule showing a horizontal analysis for 2009 using 2008 as the base year.

E15-2 Operating data for Gallup Corporation are presented below.
2009                2008
Sales                                        $750,000         $600,000
Cost of goods sold                   465,000           390,000
Selling expenses                      120,000           72,000
Administrative expenses          60,000                         54,000
Income tax expense                 33,000                         24,000
Net income                              72,000                         60,000
Instructions
Prepare a schedule showing a vertical analysis for 2009 and 2008.

E15-11 Scully Corporation’s comparative balance sheets are presented below.

                                        SCULLY CORPORATION

                                              Balance Sheets

                                                   December 31

                                                           2008                                      2007

Cash                                                 $ 4,300                                  $ 3,700

Accounts receivable                          21,200                                  23,400

Inventory                                           10,000                                    7,000

Land                                                  20,000                                  26,000

Building                                             70,000                                  70,000

Accumulated depreciation              (15,000)                               (10,000)

Total                                               $110,500                              $120,100

Accounts payable                           $ 12,370                                $ 31,100

Common stock                                  75,000                                   69,000

Retained earnings                              23,130                                   20,000

Total                                                 $110,500                             $120,100

Scully’s 2008 income statement included net sales of $100,000, cost of goods sold of $60,000, and net income of $15,000.

Instructions

Compute the following ratios for 2008.

(a) Current ratio.

(b) Acid-test ratio.

(c) Receivables turnover.

(d) Inventory turnover.

(e) Profit margin.

(f) Asset turnover.

(g) Return on assets.

(h) Return on common stockholders’ equity.

(i) Debt to total assets ratio.