Wiley Assignment Week 5

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Pioneer Corporation had the transactions below during 2011.

Analyze the transactions and indicate whether each transaction resulted in a cash flow from operating activities, investing activities, financing activities, or noncash investing and financing activities.

(a)	Issued $50,000 par value common stock for cash.
(b)	Purchased a machine for $30,000, giving a long-term note in exchange.
(c)	Issued $200,000 par value common stock upon conversion of bonds having a face value of $200,000.
(d)	Declared and paid a cash dividend of $18,000.
(e)	Sold a long-term investment with a cost of $15,000 for $15,000 cash.
(f)	Collected $16,000 of accounts receivable.
(g)	Paid $18,000 on accounts payable.

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E13-8

Here are comparative balance sheets for Taguchi Company.

TAGUCHI COMPANY
Comparative Balance Sheets
December 31
Assets	2011	2010
Cash	$73,000	$22,000
Accounts receivable	85,000	76,000
Inventories	170,000	189,000
Land	75,000	100,000
Equipment	260,000	200,000
Accumulated depreciation	(66,000)	(32,000)
Total	$597,000	$555,000

Liabilities and Stockholders' Equity
Accounts payable	$39,000	$47,000
Bonds payable	150,000	200,000
Common stock ($1 par)	216,000	174,000
Retained earnings	192,000	134,000
Total	$597,000	$555,000

Additional information:

1. Net income for 2011 was $103,000.

2. Cash dividends of $45,000 were declared and paid.

3. Bonds payable amounting to $50,000 were redeemed for cash $50,000.

4. Common stock was issued for $42,000 cash.

5. No equipment was sold during 2011, but land was sold at cost.

Complete the statement of cash flows for 2011 using the indirect method. (List amounts from largest positive to smallest positive followed by most negative to least negative, e.g. 15, 14, 10, -17, -5, -1. If amount decreases cash flow, use either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

TAGUCHI COMPANY
Statement of Cash Flows
For the Year Ended December 31, 2011
Cash flows from operating activities
		$
Adjustments to reconcile net income
to net cash provided by operating activities
	$



Net cash by operating activities

Cash flows from investing activities


Net cash by investing activities

Cash flows from financing activities



Net cash by financing activities

Net in cash
Cash at beginning of period
Cash at end of period		$

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E14-1

Financial information for Blevins Inc. is presented below.

	December 31, 2012	December 31, 2011
Current assets	$125,000		$100,000
Plant assets (net)	396,000		330,000
Current liabilities	91,000		70,000
Long-term liabilities	133,000		95,000
Common stock, $1 par	161,000		115,000
Retained earnings	136,000		150,000

Complete the schedule showing a horizontal analysis for 2012 using 2011 as the base year. (If amount is a decrease, use either a negative sign preceding the number eg -45 or parentheses eg (45). Round percentages to 1 decimal place, e.g. 10.5. List items in the order given in the question.)

BLEVINS INC.
Condensed Balance Sheet
December 31
			Increase or (Decrease)
	2012	2011	Amount	Percentage
Assets
	$	$	$	%
				%
Total assets	$	$	$	%

Liabilities
	$	$	$	%
				%
Total liabilities	$	$	$	%

Stockholders' Equity
	$	$	$	%
				%
Total stockholders equity	$	$	$	%
Total liabilities and stockholders' equity	$	$	$	%

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P13-9A

Condensed financial data of Arma Inc. follow.

ARMA INC.
Comparative Balance Sheets
December 31
Assets	2011	2010
Cash	$90,800	$48,400
Accounts receivable	92,800	33,000
Inventories	112,500	102,850
Prepaid expenses	28,400	26,000
Investments	138,000	114,000
Plant assets	270,000	242,500
Accumulated depreciation	(50,000)	(52,000)
Total	$682,500	$514,750

Liabilities and Stockholders' Equity
Accounts payable	$112,000	$67,300
Accrued expenses payable	16,500	17,000
Bonds payable	110,000	150,000
Common stock	220,000	175,000
Retained earnings	224,000	105,450
Total	$682,500	$514,750

ARMA INC.
Income Statement
For the Year Ended December 31, 2011
Sales		$392,780
Less:
Cost of goods sold	$135,460
Operating expenses, excluding depreciation	12,410
Depreciation expense	46,500
Income taxes	27,280
Interest expense	4,730
Loss on sale of plant assets	7,500	233,880
Net income		$158,900

Additional information:

1. New plant assets costing $85,000 were purchased for cash during the year.

2. Old plant assets having an original cost of $57,500 were sold for $1,500 cash.

3. Bonds matured and were paid off at face value for cash.

4. A cash dividend of $40,350 was declared and paid during the year.

Complete the statement of cash flows using the indirect method. (List amounts from largest positive to smallest positive followed by most negative to least negative, e.g. 15, 14, 10, -17, -5, -1. If amount decreases cash flow, use either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

ARMA INC.
Statement of Cash Flows
For the Year Ended December 31, 2011
Cash flows from operating activities
		$
Adjustments to reconcile net income to net
cash provided by operating activities
	$






Net cash by operating activities

Cash flows from investing activities



Net cash by investing activities

Cash flows from financing activities



Net cash by financing activities

Net in cash
Cash at beginning of period
Cash at end of period

P13-10A

Condensed financial data of Arma Inc. follow.

ARMA INC.
Comparative Balance Sheets
December 31
Assets	2011	2010
Cash	$90,800	$48,400
Accounts receivable	92,800	33,000
Inventories	112,500	102,850
Prepaid expenses	28,400	26,000
Investments	138,000	114,000
Plant assets	270,000	242,500
Accumulated depreciation	(50,000)	(52,000)
Total	$682,500	$514,750

Liabilities and Stockholders' Equity
Accounts payable	$112,000	$67,300
Accrued expenses payable	16,500	17,000
Bonds payable	110,000	150,000
Common stock	220,000	175,000
Retained earnings	224,000	105,450
Total	$682,500	$514,750

ARMA INC.
Income Statement
For the Year Ended December 31, 2011
Sales		$392,780
Less:
Cost of goods sold	$135,460
Operating expenses, excluding depreciation	12,410
Depreciation expense	46,500
Income taxes	27,280
Interest expense	4,730
Loss on sale of plant assets	7,500	233,880
Net income		$158,900

Additional information:

1. New plant assets costing $85,000 were purchased for cash during the year.

2. Old plant assets having an original cost of $57,500 were sold for $1,500 cash.

3. Bonds matured and were paid off at face value for cash.

4. A cash dividend of $40,350 was declared and paid during the year.

Further analysis reveals that accounts payable pertain to merchandise creditors.

Complete the statement of cash flows for Arma Inc. using the direct method. (List amounts from largest positive to smallest positive followed by most negative to least negative, e.g. 15, 14, 10, -17, -5, -1. If amount decreases cash flow for financing and investing activities, use either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). List all other amounts as positive.)

ARMA INC.
Statement of Cash Flows
For the Year Ended December 31, 2011
Cash flows from operating activities
		$
Less cash payments
	$



Net cash by operating activities

Cash flows from investing activities



Net cash by investing activities

Cash flows from financing activities



Net cash by financing activities

Net in cash
Cash at beginning of period
Cash at end of period		$

P14-2A

The comparative statements of Villa Tool Company are presented below.

VILLA TOOL COMPANY
Income Statement
For the Year Ended December 31
	2012	2011
Net sales	$1,818,500	$1,750,500
Cost of goods sold	1,011,500	996,000
Gross profit	807,000	754,500
Selling and administrative expense	516,000	479,000
Income from operations	291,000	275,500
Other expenses and losses
Interest expense	18,000	14,000
Income before income taxes	273,000	261,500
Income tax expense	81,000	77,000
Net income	$ 192,000	$ 184,500

VILLA TOOL COMPANY
Balance Sheets
December 31
Assets	2012	2011
Current assets
Cash	$ 60,100	$ 64,200
Short-term investments	69,000	50,000
Accounts receivable (net)	117,800	102,800
Inventory	123,000	115,500
Total current assets	369,900	332,500
Plant assets (net)	600,300	520,300
Total assets	$970,200	$852,800

Liabilities and Stockholders' Equity
Current liabilities
Accounts payable	$160,000	$145,400
Income taxes payable	43,500	42,000
Total current liabilities	203,500	187,400
Bonds payable	200,000	200,000
Total liabilities	403,500	387,400
Stockholders' equity
Common stock ($5 par)	280,000	300,000
Retained earnings	286,700	165,400
Total stockholders' equity	566,700	465,400
Total liabilities and stockholders' equity	$970,200	$852,800

Compute the following ratios for 2012. (Weighted average common shares in 2012 were 57,000, and all sales were on account.) (Round earnings per share, current ratio and acid-test ratio to 2 decimal places, e.g. 10.50. Round other answers to 1 decimal place, e.g. 10.5.)

(a)	Earnings per share	$
(b)	Return on common stockholders' equity	%
(c)	Return on assets	%
(d)	Current	:1
(e)	Acid-test	:1
(f)	Receivables turnover	times
(g)	Inventory turnover	times
(h)	Times interest earned	times
(i)	Asset turnover	times
(j)	Debt to total assets