| | | Ashford University ACC205 |
| | | Guidance Report |
| | | Week Five |
| | LISTEN TO AUDIO/VIDEO EXPLAINING THE GUIDANCE REPORT | | | | Guidance Report Download Date | | 11/28/17 | Guidance Report Revision Date | | 12/1/17 |
| | | | YELLOW INDICATES ACCOUNT AMOUNTS CHANGED |
| | | | Change Account to: |
| | | | Based Upon Course Start Date |
| | Account to
be changed | Original
Amount | Jan - Feb | Mar-Apr | May-Jun | Jul-Aug | Sept-Oct | Nov-Dec |
| | Ch 9 Ex 3 |
| | Edison |
| | Cash | $4,000 | 5,000 | 6,000 | 7,000 | 8,000 | 9,000 | 10,000 |
| | Stagg |
| | Cash | $2,500 | 3,500 | 4,500 | 5,500 | 6,500 | 7,500 | 8,500 |
| | Thornton |
| | Cash | $1,000 | 2,000 | 3,000 | 4,000 | 5,000 | 6,000 | 7,000 |
| | Questions | YOUR ANSWERS BASED UPON COURSE START DATE |
| | Compute the current and quick ratios for each of the three companies. (Round calculations to two decimal places.) Which firm is the most liquid? Why? |
| | Edison |
| | Current ratio |
| | Quick ratio |
| | Stagg |
| | Current ratio |
| | Quick ratio |
| | Thornton |
| | Current ratio |
| | Quick ratio |
| | Suppose Thornton is using FIFO for inventory valuation and Edison is using LIFO. Comment on the comparability of information between these two companies. |
| | If all short-term notes payable are due on July 11 at 8 a.m., comment on each company's ability to settle its obligation in a timely manner. |
| | Account to
be changed | Original
Amount | Jan - Feb | | Mar-Apr | | May-Jun | | Jul-Aug | | Sept-Oct | | Nov-Dec |
| | Ch 9 Ex 4 |
| | 20X5 | 20X4 | 20X5 | 20X4 | 20X5 | 20X4 | 20X5 | 20X4 | 20X5 | 20X4 | 20X5 | 20X4 | 20X5 | 20X4 |
| Net Credit Sales | $832,000 | $760,000 | 842,000 | 760,000 | 852,000 | 760,000 | 862,000 | 760,000 | 872,000 | 760,000 | 882,000 | 760,000 | 892,000 | 760,000 | | | | | | | | Net Credit Sales | $832,000 | $760,000 |
| Cost of Goods Sold | 440,000 | 350,000 | 450,000 | 350,000 | 460,000 | 350,000 | 470,000 | 350,000 | 480,000 | 350,000 | 490,000 | 350,000 | 500,000 | 350,000 | | | | | | | | Cost of Goods Sold | 440,000 | 350,000 |
| | Questions | YOUR ANSWERS BASED UPON COURSE START DATE |
| | The company is planning to borrow $300,000 via a 90-day bank loan to cover short-term operating needs. |
| | a. Compute the accounts-receivable and inventory-turnover ratios for 20X5 |
| | Accounts Receivable Turnover |
| | Inventory Turnover |
| | Study the ratios from part (a) and comment on the company's ability to repay a bank loan in 90 days. |
| | Suppose that Alaska's major line of business involves the processing and distribution of fresh and frozen fish throughout the United States. Do you have any concerns about the company's inventory-turnover ratio? Briefly discuss. |
| | Account to
be changed | Original
Amount | Jan - Feb | | Mar-Apr | | May-Jun | | Jul-Aug | | Sept-Oct | | Nov-Dec |
| | Ch 9 Pb 1 |
| | 20X5 | 20X4 | 20X5 | 20X4 | 20X5 | 20X4 | 20X5 | 20X4 | 20X5 | 20X4 | 20X5 | 20X4 | 20X5 | 20X4 |
| Assets |
| Current Assets | PLACE YOUR ANSWERS BELOW STARTING ON ROW 99 |
| Cash | 11250 | 12500 | $12,250 | $13,400 | $13,250 | $14,300 | 21,500 | 27,700 | $15,250 | $16,100 | $16,250 | $17,000 | $17,250 | $17,900 |
| Accounts Receivable (net) | 18500 | 25000 | 19,500 | 25,900 | 20,500 | 26,800 | 41,500 | 37,700 | 22,500 | 28,600 | 23,500 | 29,500 | 24,500 | 30,400 |
| Inventories | 38500 | 35000 | 39,500 | 35,900 | 40,500 | 36,800 | 6,750 | 6,450 | 42,500 | 38,600 | 43,500 | 39,500 | 44,500 | 40,400 |
| Prepaid Expense | 3750 | 3750 | 4,750 | 4,650 | 5,750 | 5,550 | $75,000 | $78,950 | 7,750 | 7,350 | 8,750 | 8,250 | 9,750 | 9,150 |
| Total Current Assets | 72000 | 76250 | $73,000 | $77,150 | $74,000 | $78,050 | $105,750 | $103,950 | $76,000 | $79,850 | $77,000 | $80,750 | $78,000 | $81,650 |
| Buildings (net) | 102750 | 101250 | $103,750 | $102,150 | $104,750 | $103,050 | 31,500 | 32,700 | $106,750 | $104,850 | $107,750 | $105,750 | $108,750 | $106,650 |
| Equipment (net) | 28500 | 30000 | 29,500 | 30,900 | 30,500 | 31,800 | 35,000 | 42,700 | 32,500 | 33,600 | 33,500 | 34,500 | 34,500 | 35,400 |
| Vehicles (net) | 32000 | 40000 | 33,000 | 40,900 | 34,000 | 41,800 | $166,250 | $173,950 | 36,000 | 43,600 | 37,000 | 44,500 | 38,000 | 45,400 |
| Total Property, Plant, and Equipment | 163250 | 171250 | $164,250 | $172,150 | $165,250 | $173,050 | $17,750 | $5,200 | $167,250 | $174,850 | $168,250 | $175,750 | $169,250 | $176,650 |
| Trademarks (net) | 14750 | 2500 | $15,750 | $3,400 | $16,750 | $4,300 | $253,000 | $252,700 | $18,750 | $6,100 | $19,750 | $7,000 | $20,750 | $7,900 |
| Total assets | 250000 | 250000 | $251,000 | $250,900 | $252,000 | $251,800 | $52,000 | $72,700 | $254,000 | $253,600 | $255,000 | $254,500 | $256,000 | $255,400 |
| Accounts Payable | 49000 | 70000 | $50,000 | $70,900 | $51,000 | $71,800 | 16,500 | 42,700 | $53,000 | $73,600 | $54,000 | $74,500 | $55,000 | $75,400 |
| Notes Payable | 13500 | 40000 | 14,500 | 40,900 | 15,500 | 41,800 | 5,500 | 27,700 | 17,500 | 43,600 | 18,500 | 44,500 | 19,500 | 45,400 |
| Federal Taxes Payable | 2500 | 25000 | 3,500 | 25,900 | 4,500 | 26,800 | $68,000 | $137,700 | 6,500 | 28,600 | 7,500 | 29,500 | 8,500 | 30,400 |
| Total Current Liabilities | 65000 | 135000 | $66,000 | $135,900 | $67,000 | $136,800 | $53,000 | $27,700 | $69,000 | $138,600 | $70,000 | $139,500 | $71,000 | $140,400 |
| Long-Term Debt | 50000 | 25000 | $51,000 | $25,900 | $52,000 | $26,800 | $118,000 | $162,700 | $54,000 | $28,600 | $55,000 | $29,500 | $56,000 | $30,400 |
| Total Liabilities | 115000 | 160000 | $116,000 | $160,900 | $117,000 | $161,800 | $28,000 | $27,700 | $119,000 | $163,600 | $120,000 | $164,500 | $121,000 | $165,400 |
| Common Stock, $10 par | 25000 | 25000 | $26,000 | $25,900 | $27,000 | $26,800 | 113,000 | 67,700 | $29,000 | $28,600 | $30,000 | $29,500 | $31,000 | $30,400 |
| Retained Earnings | 110000 | 65000 | 111,000 | 65,900 | 112,000 | 66,800 | $138,000 | $92,700 | 114,000 | 68,600 | 115,000 | 69,500 | 116,000 | 70,400 |
| Total Stockholders' Equity | 135000 | 90000 | $136,000 | $90,900 | $137,000 | $91,800 | $253,000 | $252,700 | $139,000 | $93,600 | $140,000 | $94,500 | $141,000 | $95,400 |
| Total Liabilities and Stockholders' Equity | 250000 | 250000 | $251,000 | $250,900 | $252,000 | $251,800 | 258,000 | 258,000 | $254,000 | $253,600 | $255,000 | $254,500 | $256,000 | $255,400 |
| WATERLOO CORPORATION |
| Comparative Income Statements |
| For the Years Ending December 31, 20X5 and 20X4 | 20X5 | 20X4 | 20X5 | 20X4 | 20X5 | 20X4 | 20X5 | 20X4 | 20X5 | 20X4 | 20X5 | 20X4 | 20X5 | 20X4 |
| Net Sales | 550000 | 500000 | 575,000 | 510,000 | 580,000 | 520,000 | 585,000 | 521,000 | 590,000 | 523,000 | 595,000 | 525,000 | 600,000 | 535,000 |
| Prepare a horizontal analysis of the balance sheet showing percentage changes from 20X4 to 20X5. Round all calculations in parts (a) and (b) to two decimal places. | Questions | YOUR ANSWERS BASED UPON COURSE START DATE |
| WATERLOO CORPORATION |
| Comparative Balance Sheets |
| December 31,20X5 and 20X4 |
| Assets |
| Current Assets | | % Change |
| Cash |
| Accounts Receivable (net) |
| Inventories |
| Prepaid Expense |
| Total Current Assets |
| Buildings (net) |
| Equipment (net) |
| Vehicles (net) |
| Total Property, Plant, and Equipment |
| Trademarks (net) |
| Total assets |
| Accounts Payable |
| Notes Payable |
| Federal Taxes Payable |
| Total Current Liabilities |
| Long-Term Debt |
| Total Liabilities |
| Common Stock, $10 par |
| Retained Earnings |
| Total Stockholders' Equity |
| Total Liabilities and Stockholders' Equity |
| WATERLOO CORPORATION |
| Comparative Income Statements |
| Prepare a vertical analysis of the 20X5 income statement by relating each item to net sales. | | 20X5 |
| Net Sales |
| Cost of Goods Sold |
| Gross Profit |
| Operating Expense |
| Income Before Interest and Taxes |
| Interest Expense |
| Income Before Taxes |
| Income Tax Expense |
| Net Income |
| | Account to
be changed | Original
Amount | Jan - Feb | | Mar-Apr | | May-Jun | | Jul-Aug | | Sept-Oct | | Nov-Dec |
| | Ch 9 Pb 2 |
| LONE PINE COMPANY |
| Comparative Balance Sheets |
| December 31, 20X2 and 20X1 ($000 Omitted) |
| | 20X2 | 20X1 | 20X2 | 20X1 | 20X2 | 20X1 | 20X2 | 20X1 | 20X2 | 20X1 | 20X2 | 20X1 | 20X2 | 20X1 |
| Assets |
| Current Assets | PLACE YOUR ANSWERS BELOW STARTING ON ROW 176 |
| Cash and Short-Term Investments | 400 | 600 | 1,400 | 1,400 | 2,400 | 2,200 | 3,400 | 3,000 | 4,400 | 3,800 | 5,400 | 4,600 | 6,400 | 5,400 |
| Accounts Receivable (net) | 3000 | 2400 | 4,000 | 3,200 | 5,000 | 4,000 | 6,000 | 4,800 | 7,000 | 5,600 | 8,000 | 6,400 | 9,000 | 7,200 |
| Inventories | 2000 | 2200 | 4,000 | 3,000 | 4,000 | 3,800 | 5,000 | 4,600 | 6,000 | 5,400 | 7,000 | 6,200 | 8,000 | 7,000 |
| Total Current Assets | 5400 | 5200 | 9,400 | 7,600 | 11,400 | 10,000 | 14,400 | 12,400 | 17,400 | 14,800 | 20,400 | 17,200 | 23,400 | 19,600 |
| Land | 1700 | 600 | 2,700 | 1,400 | 3,700 | 2,200 | 4,700 | 3,000 | 5,700 | 3,800 | 6,700 | 4,600 | 7,700 | 5,400 |
| Buildings and Equipment (net) | 1500 | 1000 | 2,500 | 1,800 | 3,500 | 2,600 | 4,500 | 3,400 | 5,500 | 4,200 | 6,500 | 5,000 | 7,500 | 5,800 |
| Total Property, Plant, and Equipment | 3200 | 1600 | 5,200 | 3,200 | 7,200 | 4,800 | 9,200 | 6,400 | 11,200 | 8,000 | 13,200 | 9,600 | 15,200 | 11,200 |
| Total Assets | 8600 | 6800 | 14,600 | 10,800 | 18,600 | 14,800 | 23,600 | 18,800 | 28,600 | 22,800 | 33,600 | 26,800 | 38,600 | 30,800 |
| Accounts Payable | 1800 | 1700 | 2,800 | 2,500 | 3,800 | 3,300 | 4,800 | 4,100 | 5,800 | 4,900 | 6,800 | 5,700 | 7,800 | 6,500 |
| Notes Payable | 1100 | 1900 | 2,100 | 2,700 | 3,100 | 3,500 | 4,100 | 4,300 | 5,100 | 5,100 | 6,100 | 5,900 | 7,100 | 6,700 |
| Total Current Liabilities | 2900 | 3600 | 3,900 | 4,400 | 4,900 | 5,200 | 5,900 | 6,000 | 6,900 | 6,800 | 7,900 | 7,600 | 8,900 | 8,400 |
| Bonds Payable | 4100 | 2100 | 5,100 | 2,900 | 6,100 | 3,700 | 7,100 | 4,500 | 8,100 | 5,300 | 9,100 | 6,100 | 10,100 | 6,900 |
| Total Liabilities | 7000 | 5700 | 9,000 | 7,300 | 11,000 | 8,900 | 13,000 | 10,500 | 15,000 | 12,100 | 17,000 | 13,700 | 19,000 | 15,300 |
| Common Stock Par value $1 (Par value not in original problem, but needed to calculate ratio - dividend payout rate) | 200 | 200 | 1,200 | 1,000 | 2,200 | 1,800 | 3,200 | 2,600 | 4,200 | 3,400 | 5,200 | 4,200 | 6,200 | 5,000 |
| Number of Shares | 200 | 200 | 1,200 | 1,000 | 2,200 | 1,800 | 3,200 | 2,600 | 4,200 | 3,400 | 5,200 | 4,200 | 6,200 | 5,000 |
| Retained Earnings | 1400 | 900 | 4,400 | 2,500 | 5,400 | 4,100 | 7,400 | 5,700 | 9,400 | 7,300 | 11,400 | 8,900 | 13,400 | 10,500 |
| Total Stockholders' Equity | 1600 | 1100 | 5,600 | 3,500 | 7,600 | 5,900 | 10,600 | 8,300 | 13,600 | 10,700 | 16,600 | 13,100 | 19,600 | 15,500 |
| Total Liabilities and Stockholders' Equity | 8600 | 6800 | 14,600 | 10,800 | 18,600 | 14,800 | 23,600 | 18,800 | 28,600 | 22,800 | 33,600 | 26,800 | 38,600 | 30,800 |
| LONE PINE COMPANY |
| Statement of Income and Retained Earnings |
| For the Year Ending December 31,20X2 ($000 Omitted) |
| Net Sales* | 36000 | | 39,000 | | 41,000 | | 45,000 | | 46,000 | | 49,000 | | 55,000 |
| | Questions | YOUR ANSWERS BASED UPON COURSE START DATE |
| Compute the following items for Lone Pine Company for 20X2, rounding all calculations to two decimal places and do nt insert a percent symbol. |
| Quick ratio |
| Current ratio |
| Inventory-turnover ratio |
| Accounts-receivable-turnover ratio |
| Return-on-assets ratio |
| Net-profit-margin ratio |
| Return-on-common-stockholders' equity |
| Debt-to-total assets |
| Number of times that interest is earned |
| Dividend payout rate |
| |
| | Account to
be changed | Original
Amount | Jan - Feb | Mar-Apr | May-Jun | Jul-Aug | Sept-Oct | Nov-Dec |
| | Ch 9 Pb 3 |
| | Cost of goods sold % of sales | 60.0% | 60.1% | 60.2% | 60.3% | 60.4% | 60.5% | 60.6% |
| | Questions | YOUR ANSWERS BASED UPON COURSE START DATE |
| LOCK BOX INC. |
| Income Statement |
| For the Year Ending December 31, 20X3 |
| Sales |
| Cost of Goods Sold |
| Gross Profit |
| Operating Expenses and Interest |
| Income Before Taxes |
| Income taxes, 40% |
| Net income |
| LOCK BOX INC. |
| Balance Sheet |
| December 31, 20X3 |
| Assets |
| Cash |
| Accounts Receivable |
| Inventory |
| Property, Plant, and Equipment |
| Total assets |
| Liabilities and Stockholders' Equity |
| Accounts Payable |
| Notes Payable: Short-Term |
| Bonds Payable |
| Common Stock |
| Retained Earnings |
| Total Liabilities and Stockholders' Equity |
lstoe2p
GuidanceReportWeekFive.xlsx
