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Grading Rubric

Assignment: Module 6 Problems
Content and Development 41 Points Possible	Points Possible	Points Earned	Comments
Problem 2 Chapter 13	5
Problem 3 Chapter 13	5
Problem 4 Chapter 13	5
Problem 1 Chapter 14	6
Problem 5 Chapter 14	8
Problem 6 Chapter 14	6
Problem 7 Chapter 14	8
Problem 8 Chapter 14	8
Readability and Style 5 Points Possible	Points Possible	Points Earned	Comments
Work Shown	5
Mechanics 4 Points Possible	Points Possible	Points Earned	Comments
Rules of grammar, usage and punctuation are followed.	2
Spelling is correct.	2
Total Points	60	0

Adjusted Points		0.0%	Comments:
Comments:

&"Arial,Bold"AT&&T Proprietary (Internal Use Only)&"Arial,Regular" Not for use or disclosure outside the AT&&T companies except under written agreement

Chapter 13 Problems

Prob 13-2	Use your knowledge of balance sheets to fill in the missing amounts:
	ASSETS
	Cash	$ 10,000
	Accounts receivable	$ 100,000
	Inventory
	Total current assets	$ 220,000
	Gross plant and equipment	$ 500,000
	Less: accumulated depreciation
	Net plant and equipment	$ 375,000
	Total assets
	LIABILITIES
	Accounts payable	$ 12,000
	Notes payable	$ 50,000
	Total current liabilities
	Long-term debt
	Total liabilities	$ 190,000
	Common stock ($1 par, 100,000 shares)
	Paid-in capital
	Retained earnings	$ 150,000
	Total stockholders’ equity
	Total liabilities and equity
Prob 13-3	Use your knowledge of balance sheets to fill in the missing amounts:
	ASSETS
	Cash	$ 50,000
	Accounts receivable	$ 80,000
	Inventory	$ 100,000
	Total current assets
	Gross plant and equipment
	Less: accumulated depreciation	$ 130,000
	Net plant and equipment	$ 600,000
	Total assets
	LIABILITIES
	Accounts payable	$ 12,000
	Notes payable	$ 50,000
	Total current liabilities
	Long-term debt
	Total liabilities
	Common stock ($1 par, 100,000 shares)
	Paid-in capital	$ 250,000
	Retained earnings	$ 200,000
	Total stockholders’ equity
	Total liabilities and equity	$ 830,000
Prob 13-4	Use your knowledge of balance sheets and common-size statements to fill in the missing dollar amounts:
	ASSETS
	Cash	$ 25,000	3.4%
	Accounts receivable	$ 125,000
	Inventory		27.1%
	Total current assets	$ 350,000
	Gross plant and equipment		95.0%
	Less: accumulated depreciation	$ 313,000	42.5%
	Net plant and equipment
	Total assets	$ 737,000	100.0%
	LIABILITIES
	Accounts payable		15.7%
	Notes payable	$ 29,000	3.9%
	Total current liabilities
	Long-term debt	$ 248,000	33.6%
	Total liabilities	$ 393,000
	Common stock ($.01 par, 450,000 shares)	$ 4,500	0.6%
	Paid-in capital	$ 220,500	29.9%
	Retained earnings
	Total stockholders’ equity	$ 344,000	46.7%
	Total liabilities and equity		100.0%

Chapter 14 Problems

Prob 14-1	The Robinson Company has the following current assets and current liabilities for these two years:
		2011	2012
	Cash and marketable securities	$ 50,000	$ 50,000
	Accounts receivable	$ 300,000	$ 350,000
	Inventories	$ 350,000	$ 500,000
	Total current assets	$ 700,000	$ 900,000
	Accounts payable	$ 200,000	$ 250,000
	Bank loan	$ - 0	$ 150,000
	Accruals	$ 150,000	$ 200,000
	Total current liabilities	$ 350,000	$ 600,000
	a. Compare the current ratios between the two years.
		2011	2012
	Current ratio
	Comments:
	b. Compare the acid-test ratios between 2011 and 2012.
	Comment on your findings.
		2011	2012
	Acid-test ratio
	Comments:
Prob 14-5	Following are selected financial data in thousands of dollars for the Hunter Corporation.
		2012	2011
	Current assets	$ 500	$ 400
	Fixed assets, net	$ 700	$ 600
	Total assets	$ 1,200	$ 1,000
	Current liabilities	$ 300	$ 200
	Long-term debt	$ 200	$ 200
	Common equity	$ 700	$ 600
	Total liabilities and equity	$ 1,200	$ 1,000
	Net sales	$ 1,500	$ 1,200
	Total expenses	$ 1,390	$ 1,100
	Net income	$ 110	$ 100
	a. Calculate Hunter’s rate of return on total assets in 2012 and in 2011.
		2012	2011
	Rate of return on total assets
	Did the ratio improve or worsen?
	b. Diagram the expanded Du Pont system for Hunter for 2012. Insert the appropriate dollar amounts wherever possible.
	Note: Fill in the [Text] boxes in the diagram below with the correct information. You should not have to add anything
	to the diagram below. Refer to page 404 in the textbook and pay close attention to where this diagram begins
	c. Use the Du Pont system to calculate the return on assets for the two years, and determine why they changed.
			2012	2011
		Return on assets
Prob 14-6	Following are financial statements for the Genatron Manufacturing Corporation for 2012 and 2011.
	GENATRON MANUFACTURING CORPORATION
	BALANCE SHEET
	ASSETS	2012	2011
	Cash	$ 40,000	$ 50,000
	Accts. Receivable	$ 260,000	$ 200,000
	Inventory	$ 500,000	$ 450,000
	Total current assets	$ 800,000	$ 700,000
	Fixed assets, net	$ 400,000	$ 300,000
	Total assets	$ 1,200,000	$ 1,000,000
	LIABILITIES AND EQUITY
	Accts. Payable	$ 170,000	$ 130,000
	Bank loan	$ 90,000	$ 90,000
	Accruals	$ 70,000	$ 50,000
	Total current liabilities	$ 330,000	$ 270,000
	Long-term debt, 12%	$ 400,000	$ 300,000
	Common stock, $10 par	$ 300,000	$ 300,000
	Capital surplus	$ 50,000	$ 50,000
	Retained earnings	$ 120,000	$ 80,000
	Total liabilities & equity	$ 1,200,000	$ 1,000,000
	GENATRON MANUFACTURING CORPORATION
	INCOME STATEMENT
		2012	2011
	Net sales	$ 1,500,000	$ 1,300,000
	Cost of goods sold	$ 900,000	$ 780,000
	Gross profit	$ 600,000	$ 520,000
	Expenses: general and administrative	$ 150,000	$ 150,000
	Marketing	$ 150,000	$ 130,000
	Depreciation	$ 53,000	$ 40,000
	Interest	$ 57,000	$ 45,000
	Earnings before taxes	$ 190,000	$ 155,000
	Income taxes	$ 76,000	$ 62,000
	Net income	$ 114,000	$ 93,000
	a. Apply Du Pont analysis to both the 2012 and 2011 financial statements’ data.
		2011	2012
	Net Income
	Sales
	Total Assets
	Equity
	ROE
	b. Explain how financial performance differed between 2012 and 2011.
Prob 14-7	This problem uses the financial statements for the Genatron Manufacturing Corporation for the years 2012 and 2011 from
	Problem 6.
	a. Calculate Genatron’s dollar amount of net working capital in each year.
		Net Working Capital
	2011
	2012
	b. Calculate the current ratio and the acid-test ratio in each year.
		Current Ratio
	2011
	2012
		Acid-test ratio
	2011
	2012
	c. Calculate the average collection period and the inventory turnover ratio in each year.
		Average collection period
	2011
	2012
		Inventory turnover
	2011
	2012
	d. What changes in the management of Genatron’s current assets seem to have occurred between the two years?
Prob 14-8	Genatron Manufacturing expects its sales to increase by 10 percent in 2013. Estimate the firm’s external financing needs by
	using the percent-of-sales method for the 2012 data. Assume that no excess capacity exists and that one-half of the 2012 net income will
	be retained in the business.
	EFN = ((TA/NS)(∆NS)) - (((AP + AC)/NS)∆NS) - (((NS13)(NPM))/(NS)(RR))
		2013 Forecasted sales (NS13)
		Change in sales (∆NS)
		Total assets (TA)
		Net sales (NS)
		Accounts payable (AP)
		Accruals (AC)
		Net profit margin (NPM)
		Percent of net income retained in firm (RR)
		EFN