WileyPlus Brief Exercise 18
LBM2014
brief_exercise_18.docx|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brief Exercise 18-2 |
|
|
Schellhammer Corporation reported the following amounts in 2013, 2014, and 2015.
|
|
|
2013 |
|
2014 |
|
2015 |
|||
|
Current assets |
|
$200,000 |
|
|
$210,000 |
|
|
$240,000 |
|
|
Current liabilities |
|
$150,000 |
|
|
$168,000 |
|
|
$184,000 |
|
|
Total assets |
|
$500,000 |
|
|
$600,000 |
|
|
$620,000 |
|
(b) Perform each of the three types of analysis on Schellhammer’s current assets. (Round percentages to 0 decimal places, e.g. 43% and ratios to 2 decimal places, e.g.1.58.)
|
|
|
2013 |
|
2014 |
|
2015 |
|||
|
Horizontal Analysis |
|
|
|
|
|
|
|
|
|
|
Current assets |
|
|
% |
|
|
% |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
Vertical Analysis |
|
|
|
|
|
|
|
|
|
|
Current assets |
|
|
% |
|
|
% |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
Ratio Analysis |
|
|
|
|
|
|
|
|
|
|
Current ratio |
|
|
|
|
|
|
|
|
|
Warning
|
Don't show me this message again for the assignment |
|
Click if you would like to Show Work for this question: |
|
|
|
Brief Exercise 18-3 |
|
|
Using the following data from the comparative balance sheet of Goody Company.
|
|
|
December 31, 2015 |
|
December 31, 2014 |
||
|
Accounts receivable |
|
$520,000 |
|
|
$400,000 |
|
|
Inventory |
|
$840,000 |
|
|
$600,000 |
|
|
Total assets |
|
$3,000,000 |
|
|
$2,500,000 |
|
Illustrate horizontal analysis. (Round percentages to 0 decimal places, e.g. 12%.)
|
|
|
|
|
|
|
|
|
|
Increase or (Decrease) |
|||
|
Goody Company Balance Sheet |
|
December 31, 2015 |
|
December 31, 2014 |
|
|
Amount |
|
Percentage |
|||
|
Accounts receivable |
|
$520,000 |
|
|
$400,000 |
|
|
|
$ |
|
|
% |
|
Inventory |
|
$840,000 |
|
|
$600,000 |
|
|
|
$ |
|
|
% |
|
Total assets |
|
$3,000,000 |
|
|
$2,500,000 |
|
|
|
$ |
|
|
|
|
Brief Exercise 18-8 |
|
|
Vertical analysis (common size) percentages for Kochheim Company’s sales, cost of goods sold, and expenses are shown below.
|
Vertical Analysis |
|
2015 |
|
2014 |
|
2013 |
|
Sales |
|
100.0 |
|
100.0 |
|
100.0 |
|
Cost of goods sold |
|
60.2 |
|
62.4 |
|
63.5 |
|
Expenses |
|
25.0 |
|
25.6 |
|
27.5 |
(a) Calculate net income.
|
|
|
2015 |
|
2014 |
|
2013 |
|
Net income |
|
|
|
|
|
|
(b) Did Kochheim’s net income as a percent of sales increase, decrease, or remain unchanged over the 3-year period?
|
|
|
|
|
|
|
|
|
|
|
|
Brief Exercise 18-13 |
|
|
Guo Company has owners’ equity of $400,000 and net income of $66,000. It has a payout ratio of 20% and a return on assets of 15%. How much did Guo pay in cash dividends, and what were its average assets? (Round answers to 0 decimal places, e.g. 125.)
|
Cash dividends |
|
$ |
|
Average assets |
|
$ |
|
Exercise 18-2 |
|
|
Operating data for Navarro Corporation are presented below.
|
|
|
2015 |
|
2014 |
|
Net sales |
|
$750,000 |
|
$600,000 |
|
Cost of goods sold |
|
465,000 |
|
390,000 |
|
Selling expenses |
|
105,000 |
|
66,000 |
|
Administrative expenses |
|
60,000 |
|
54,000 |
|
Income tax expense |
|
36,000 |
|
27,000 |
|
Net income |
|
84,000 |
|
63,000 |
Prepare a schedule showing a vertical analysis for 2015 and 2014. (Round answers to 1 decimal place, e.g. 48.5%.)
|
NAVARRO CORPORATION Condensed Income Statements For the Years Ended December 31 |
|||||||
|
|
2015 |
|
2014 |
||||
|
|
Amount |
|
Percent |
|
Amount |
|
Percent |
|
Net sales |
$750,000 |
|
|
|
$600,000 |
|
|
|
Cost of goods sold |
465,000 |
|
|
|
390,000 |
|
|
|
Gross profit |
285,000 |
|
|
|
210,000 |
|
|
|
Selling expenses |
105,000 |
|
|
|
66,000 |
|
|
|
Administrative expenses |
60,000 |
|
|
|
54,000 |
|
|
|
Total operating expenses |
165,000 |
|
|
|
120,000 |
|
|
|
Income before income taxes |
120,000 |
|
|
|
90,000 |
|
|
|
Income taxes expense |
36,000 |
|
|
|
27,000 |
|
|
|
Net income |
$84,000 |
|
|
|
$63,000 |
|
|
|
Exercise 18-5 |
|
|
Suppose Nordstrom, Inc., which operates department stores in numerous states, has the following selected financial statement data for the year ending January 30, 2014.
|
NORDSTORM, INC. Balance Sheet (partial) |
||||||||
|
(in millions) |
|
End-of-Year |
|
Beginning-of-Year |
||||
|
Cash and cash equivalents |
|
|
$ 795 |
|
|
|
$ 72 |
|
|
Accounts receivable (net) |
|
|
2,035 |
|
|
|
1,942 |
|
|
Inventory |
|
|
898 |
|
|
|
900 |
|
|
Prepaid expenses |
|
|
88 |
|
|
|
93 |
|
|
Other current assets |
|
|
238 |
|
|
|
210 |
|
|
Total current assets |
|
|
$4,054 |
|
|
|
$3,217 |
|
|
Total current liabilities |
|
|
$2,014 |
|
|
|
$1,601 |
|
For the year, net sales were $8,258 and cost of goods sold was $5,328 (in millions). (a) Compute the four liquidity ratios at the end of the year. (Round answers to 1 decimal place, e.g. 1.6 .)
|
Current ratio |
|
|
:1 |
|
Acid-test ratio |
|
|
:1 |
|
Accounts receivable turnover |
|
|
times |
|
Inventory turnover |
|
|
times |
Warning
|
Don't show me this message again for the assignment |
|
Click if you would like to Show Work for this question: |
