ACC421 Week 3 Individual - WileyPlus Assignment

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Exercise 5-5

 

Bruno Company has decided to expand its operations. The bookkeeper recently completed the balance sheet presented below in order to obtain additional funds for expansion.

 

BRUNO COMPANY

BALANCE SHEET

DECEMBER 31, 2012

Current assets                  

  Cash                    $263,380

  Accounts receivable (net)                          343,380

  Inventories (lower-of-average-cost-or-market)                              404,380

  Equity investments (trading)—at cost (fair value $121,260)                         141,260

Property, plant, and equipment                               

  Buildings (net)                 571,260

  Equipment (net)                            161,260

  Land held for future use                             176,260

Intangible assets                             

  Goodwill                            83,380

  Cash surrender value of life insurance                  93,380

  Prepaid expenses                          15,380

Current liabilities                             

  Accounts payable                          136,260

  Notes payable (due next year)                                128,380

  Pension obligation                         83,260

  Rent payable                   52,380

  Premium on bonds payable                      56,380

Long-term liabilities                       

  Bonds payable                                501,260

Stockholders’ equity                     

  Common stock, $1.00 par, authorized 400,000 shares, issued 293,380                    293,380

  Additional paid-in capital                            183,380

  Retained earnings                         ?

 

Prepare a revised balance sheet given the available information. Assume that the accumulated depreciation balance for the buildings is $163,380 and for the office equipment, $108,380. The allowance for doubtful accounts has a balance of $20,380. The pension obligation is considered a long-term liability. (List current assets in order of liquidity. List property plant and equipment in order of buildings and equipment.)

 

Exercise 5-12

 

Presented below is the trial balance of Vivaldi Corporation at December 31, 2012.

 

Debit

Credit

Cash

$200,380

Sales

$7,902,370

Debt Investments (trading) (cost, $145,000)

155,370

Cost of Goods Sold

4,802,370

Debt Investments (long-term)

302,380

Equity Investments (long-term)

280,380

Notes Payable (short-term)

92,370

Accounts Payable

457,370

Selling Expenses

2,002,370

Investment Revenue

64,880

Land

260,000

Buildings

1,043,380

Dividends Payable

139,380

Accrued Liabilities

98,370

Accounts Receivable

437,370

Accumulated Depreciation—Buildings

352,000

Allowance for Doubtful Accounts

27,370

Administrative Expenses

901,880

Interest Expense

212,880

Inventory

600,380

Extraordinary Gain

81,880

Notes Payable (long-term)

903,380

Equipment

602,370

Bonds Payable

1,003,380

Accumulated Depreciation—Equipment

60,000

Franchises

160,000

Common Stock ($5 par)

1,002,370

Treasury Stock

193,370

Patents

195,000

Retained Earnings

81,380

Paid-in Capital in Excess of Par

83,380

$12,349,880

$12,349,880

 

Calculate ending retained earnings and prepare a balance sheet at December 31, 2012, for Vivaldi Corporation. Ignore income taxes. (List current assets in order of liquidity. List property plant and equipment in order of land, building and equipment.)

 

 

 

Exercise 5-15

 

Presented below is a condensed version of the comparative balance sheets for Sondergaard Corporation for the last two years at December 31.

 

2012

2011

Cash                      $307,092                                              $152,568             

Accounts receivable                       352,080                                 361,860

Investments                      101,712                                 144,744

Equipment                          582,888                                 469,440

Less: Accumulated depreciation—equipment                    (207,336               )                              (174,084               )

Current liabilities                              262,104                                 295,356

Capital stock                       312,960                                 312,960

Retained earnings                           561,372                                 346,212

 

Additional information:

 

Investments were sold at a loss (not extraordinary) of $13,692; no equipment was sold; cash dividends paid were $97,800; and net income was $312,960.

 

(a)    Prepare a statement of cash flows for 2012 for Sondergaard Corporation. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

 

Exercise 24-4

 

As loan analyst for Madison Bank, you have been presented the following information.

 

Plunkett Co.

Herring Co.

Assets

Cash                      $126,600                                              $323,600             

Receivables                        226,500                                 303,100

Inventories                         561,500                                 518,600

   Total current assets                     914,600                                 1,145,300            

Other assets                      494,000                                 616,400

   Total assets                     $1,408,600                                           $1,761,700          

                                                                                               

Liabilities and Stockholders’ Equity

Current liabilities                              $308,200                                              $350,700             

Long-term liabilities                        400,500                                 494,000

Capital stock and retained earnings                         699,900                                 917,000

   Total liabilities and stockholders’ equity                              $1,408,600                                           $1,761,700          

Annual sales                       $948,900                                              $1,514,800          

Rate of gross profit on sales                        30           %                            35           %

 

Each of these companies has requested a loan of $50,680 for 6 months with no collateral offered. In as much as your bank has reached its quota for loans of this type, only one of these requests is to be granted.

 

Compute the various ratios for each company. (Round answer to 2 decimal places, e.g. 2.25.)

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