ACC 557 Week 10 Homework Problems – Strayer University NEW

ACC/557 Week 10 Homework Problems – Strayer

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Chapter 14

Exercise 14-3

Your answer is correct.

The comparative condensed balance sheets of Garcia Corporation are presented below.
GARCIA CORPORATION
Comparative Condensed Balance Sheets
December 31
2014 2013
Assets
Current assets $ 76,000 $ 80,000
Property, plant, and equipment (net) 100,000 90,000
Intangibles 24,000 40,000
Total assets $200,000 $210,000
Liabilities and stockholders’ equity
Current liabilities $ 40,000 $ 48,000
Long-term liabilities 140,000 150,000
Stockholders’ equity 20,000 12,000
Total liabilities and stockholders’ equity $200,000 $210,000

(a) Prepare a horizontal analysis of the balance sheet data for Garcia Corporation using 2013 as a base. (If amount and percentage are a decrease show the numbers as negative, e.g. -55,000, -20% or (55,000). (20%). Round percentages to 1 decimal place, e.g. 12.3%.)
(b) Prepare a vertical analysis of the balance sheet data for Garcia Corporation in columnar form for 2014. (Round percentages to 0 decimal places, e.g. 12%.)

Exercise 14-4

Your answer is correct.

The comparative condensed income statements of Hendi Corporation are shown below.
HENDI CORPORATION
Comparative Condensed Income Statements
For the Years Ended December 31
2014 2013
Net sales $600,000 $500,000
Cost of goods sold 468,000 400,000
Gross profit 132,000 100,000
Operating expenses 60,000 54,000
Net income $ 72,000 $ 46,000

(a) Prepare a horizontal analysis of the income statement data for Hendi Corporation using 2013 as a base. (Show the amounts of increase or decrease.) (If amount and percentage are a decrease show the numbers as negative, e.g. -55,000, -20% or (55,000). (20%). Round percentages to 1 decimal place, e.g. 12.3%.)
(b) Prepare a vertical analysis of the income statement data for Hendi Corporation in columnar form for both years. (Round percentages to 1 decimal place, e.g. 12.3%.)

Exercise 14-13

Maulder Corporation has income from continuing operations of $290,000 for the year ended December 31, 2014. It also has the following items (before considering income taxes).
1. An extraordinary loss of $70,000.
2. A gain of $35,000 on the discontinuance of a division.
3. A correction of an error in last year’s financial statements that resulted in a $25,000 understatement of 2013 net income.

Assume all items are subject to income taxes at a 30% tax rate.

Prepare an income statement, beginning with income from continuing operations.

Problem 14-6A

The comparative statements of Beulah Company are presented below.
BEULAH COMPANY
Income Statement
For the Years Ended December 31
2014 2013
Net sales (all on account) $500,000 $420,000
Expenses
Cost of goods sold 315,000 254,000
Selling and administrative 120,800 114,800
Interest expense 7,500 6,500
Income tax expense 20,000 15,000
Total expenses 463,300 390,300
Net income $ 36,700 $ 29,700

BEULAH COMPANY
Balance Sheets
December 31
Assets 2014 2013
Current assets
Cash $ 21,000 $ 18,000
Short-term investments 18,000 15,000
Accounts receivable (net) 85,000 75,000
Inventory 80,000 60,000
Total current assets 204,000 168,000
Plant assets (net) 423,000 383,000
Total assets $627,000 $551,000
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable $122,000 $110,000
Income taxes payable 12,000 11,000
Total current liabilities 134,000 121,000
Long-term liabilities
Bonds payable 120,000 80,000
Total liabilities 254,000 201,000
Stockholders’ equity
Common stock ($5 par) 150,000 150,000
Retained earnings 223,000 200,000
Total stockholders’ equity 373,000 350,000
Total liabilities and stockholders’ equity $627,000 $551,000

Additional data:

The common stock recently sold at $19.50 per share.

Compute the following ratios for 2014. (Round Earnings per share and Acid-test ratio to 2 decimal places, e.g. 1.65, and all others to 1 decimal place, e.g. 6.8 or 6.8% .)