Teller Co balance sheet
xoon1. On the basis of the following data for Teller Co. for 2008 and the preceding year ended December 31, 2008, prepare a statement of cash flows. Use the indirect method of reporting cash flows from operating activities. Assume that equipment costing $125,000 was purchased for cash and equipment costing $85,000 with accumulated depreciation of $65,000 was sold for $15,000; that the stock was issued for cash; and that the only entries in the retained earnings account were net income of $51,000 and cash dividends declared of $13,000.
| Year | Year |
| 2008 | 2007 |
Cash | $100,000 | $ 78,000 |
Accounts receivable (net) | 78,000 | 85,000 |
Inventories | 101,500 | 90,000 |
Equipment | 410,000 | 370,000 |
Accumulated depreciation | (150,000) | (158,000) |
| $539,500 | $465,000 |
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|
|
Accounts payable (merchandise creditors) | $ 58,500 | $ 55,000 |
Cash dividends payable | 5,000 | 4,000 |
Common stock, $10 par | 200,000 | 170,000 |
Paid-in capital in excess of par-- |
|
|
common stock | 62,000 | 60,000 |
Retained earnings |
2. Balances of the current asset and current liability accounts at the end and beginning of the year are as follows:
| End | Beginning |
Cash | $ 62,000 | $73,000 |
Accounts receivable (net) | 75,000 | 60,000 |
Inventories | 54,000 | 47,000 |
Accounts payable |
|
|
(merchandise creditors) | 43,000 | 37,000 |
Salaries payable | 2,800 | 3,800 |
Sales (on account) | 210,000 |
|
Cost of merchandise sold | 70,000 |
|
Operating expenses other than depreciation | 67,000 |
|
Use the direct method to prepare the cash flows from operating activities section of a statement of cash flows.
3. The comparative balance sheet of Drango Company appears below:
HUERTO COMPANY
Comparative Balance Sheet
December 31, 2007
Assets | 2007 | 2006 |
Current assets | $ 340 | $280 |
Plant assets | 675 | 520 |
Total assets | $1,015 | $800 |
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Liabilities and stockholders' equity |
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Current liabilities | $ 180 | $120 |
Long-term debt | 250 | 160 |
Common stock | 325 | 320 |
Retained earnings | 260 | 200 |
Total liabilities and stockholders' equity | $1,015 | $800 |
Instructions
(a) | Using horizontal analysis, show the percentage change for each balance sheet item using 2006 as a base year. | |
(b) | Using vertical analysis, prepare a common size comparative balance sheet. | |
4. Selected data from the Conner Company are presented below:
| Total assets | $1,500,000 |
| Average assets | 1,700,000 |
| Net income | 250,000 |
| Net sales | 1,400,000 |
| Average common stockholders' equity | 1,000,000 |
| Net cash provided by operating activities | 275,000 |
| Shares of common stock outstanding | 10,000 |
Instructions
Calculate the profitability ratios that can be computed from the above information.
12 years ago
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