# 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

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

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
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