AC239 Unit 1 Wiley Plus

Wiley Plus
 
 	Your answer is correct.
 	 
Financial information for Kurzen Inc. is presented below.
		December 31, 2015		December 31, 2014
Current assets		$124,240		$101,880
Plant assets (net)		394,300		332,690
Current liabilities		89,570		73,290
Long-term liabilities		133,700		88,430
Common stock, $1 par		166,400		119,700
Retained earnings		128,870		153,150

Prepare a schedule showing a horizontal analysis for 2015 using 2014 as the base year. (Enter negative amounts and percentages using either a negative sign preceding the number e.g. -45, -45% or parentheses e.g. (45), (45%). Round percentages to 1 decimal place, e.g. 12.3%.)
KURZEN INC.
Condensed Balance Sheets
December 31
							Increase or (Decrease)
		2015		2014			Amount		Percentage	
Assets										
Current Assets		$124,240		$101,880			$  
	   %

Plant Assets (net)		394,300		332,690			  
	   %

   Total assets		$518,540		$434,570			$  
	   %

Liabilities										
Current Liabilities		$89,570		$73,290			$  
	   %

Long-term Liabilities		133,700		88,430			  
	   %

   Total liabilities		223,270		161,720			  
	   %

Stockholders' Equity										
Common Stock, $1 par		166,400		119,700			  
	   %

Retained Earnings		128,870		153,150			  
	   %

   Total stockholders' equity		295,270		272,850			  
	   %

   Total liabilities and stockholders' equity		$518,540		$434,570			$  
	   %
	
Exercise 18-2
 
 	Your answer is correct.
 	 
Operating data for Navarro Corporation are presented below.
		2015		2014
Net sales		$754,380		$595,820
Cost of goods sold		463,150		385,060
Selling expenses		119,920		69,360
Administrative expenses		56,580		58,300
Income tax expense		29,190		28,950
Net income		85,540		54,150


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	$754,380		   %
	$595,820		   %

Cost of goods sold	463,150		   %
	385,060		   %

Gross profit	291,230		   %
	210,760		   %

Selling expenses	119,920		   %
	69,360		   %

Administrative expenses	56,580		   %
	58,300		   %

Total operating expenses	176,500		   %
	127,660		   %

Income before income taxes	114,730		   %
	83,100		   %

Income taxes expense	29,190		   %
	28,950		   %

Net income	$85,540		   %
	$54,150		   %


Problem 18-1A
Comparative statement data for Farris Company and Ratzlaff Company, two competitors, appear below. All balance sheet data are as of December 31, 2015, and December 31, 2014.
		Farris Company		Ratzlaff Company
		2015		2014		2015		2014
Net sales		$1,577,176				$339,108		
Cost of goods sold		1,092,990				240,735		
Operating expenses		301,142				79,801		
Interest expense		8,700				2,950		
Income tax expense		53,735				6,490		
Current assets		320,740		$313,248		82,585		$ 78,506
Plant assets (net)		521,534		498,024		138,219		124,434
Current liabilities		65,225		74,546		34,708		30,163
Long-term liabilities		108,261		90,922		29,852		24,768
Common stock, $10 par		503,000		503,000		120,000		120,000
Retained earnings		165,788		142,804		36,244		28,009



	 
 
 	 
 	Your answer is correct.
 	 
Prepare a vertical analysis of the 2015 income statement data for Farris Company and Ratzlaff Company in columnar form. (Round percentages to 1 decimal place, e.g. 12.1%.)
Condensed Income Statement
For the Year Ended December 31, 2015
	Farris Company		Ratzlaff Company
	Dollars		Percent		Dollars		Percent
  	$  		   %		$  		   %
  	  		   %		  		   %
  	  		   %		  		   %
  	  		   %		  		   %
  	  		   %		  		   %
  							
  	  		   %		  		   %
  	  		   %		  		   %
  	  		   %		  		   %
  	$  		   %		$  		   %




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 	Your answer is correct.
 	 
Compute the return on assets and the return on common stockholders’ equity ratios for both companies. (Round answers to 1 decimal place, e.g. 12.1%.)
		Farris Company		Ratzlaff Company
Return on assets		  
 %		  
 %
Return on common stockholders’ equity		  
 %		  
 %
Click if you would like to Show Work for this question:	Open Show Work




Problem 18-2A
 
 	Your answer is correct.
 	 
The comparative statements of Painter Tool Company are presented below.
PAINTER TOOL COMPANY
Income Statement
For the Years Ended December 31
		2015		2014
Net sales		$1,818,780			$1,748,060	
Cost of goods sold		1,009,240			987,850	
Gross profit		809,540			760,210	
Selling and administrative expense		512,100			472,100	
Income from operations		297,440			288,110	
Other expenses and losses						
   Interest expense		18,260			13,010	
Income before income taxes		279,180			275,100	
Income tax expense		80,480			77,920	
Net income		$ 198,700			$ 197,180	

PAINTER TOOL COMPANY
Balance Sheets
December 31
Assets		2015		2014
Current assets						
    Cash		$59,320			$64,890	
    Short-term investments		68,790			50,330	
    Accounts receivable (net)		117,410			101,960	
    Inventory		122,500			115,440	
      Total current assets		368,020			332,620	
Plant assets (net)		595,050			517,330	
Total assets		$963,070			$849,950	
Liabilities and Stockholders’ Equity						
Current liabilities						
    Accounts payable		$159,070			$145,830	
    Income taxes payable		43,080			42,610	
      Total current liabilities		202,150			188,440	
Bonds payable		201,500			201,500	
      Total liabilities		403,650			389,940	
Stockholders’ equity						
    Common stock ($5 par)		278,000			304,000	
    Retained earnings		281,420			156,010	
      Total stockholders’ equity		559,420			460,010	
Total liabilities and stockholders’ equity		$963,070			$849,950	

All sales were on account.

Compute the following ratios for 2015. (Weighted-average common shares in 2015 were 54,000.) (Round Earnings per share, Current ratio and Acid-test ratio to 2 decimal places, e.g.1.65 or 1.65: 1, and all other answers to 1 decimal place, e.g. 6.8 or 6.8% .)
(a)		Earnings per share		$  

(b)		Return on common stockholders’ equity		  
%
(c)		Return on assets		  
%
(d)		Current ratio		  
:1
(e)		Acid-test ratio		  
:1
(f)		Accounts receivable turnover		  
times
(g)		Inventory turnover		  
times
(h)		Times interest earned		  
times
(i)		Asset turnover		  
times
(j)		Debt to total assets		  
%