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Strayer ACC100 ch18 homework

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Question

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

 

 

 

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%

 

 

 

http://edugen.wiley.com/edugen/art2/common/pixel.gif

 

 

%

 

 

 

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%

 

 

 

 

 

 

 

 

 

 

 

Vertical Analysis

 

 

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

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%

 

 

 

http://edugen.wiley.com/edugen/art2/common/pixel.gif

 

 

%

 

 

 

http://edugen.wiley.com/edugen/art2/common/pixel.gif

 

 

%

 

 

 

 

 

 

 

 

 

 

 

Ratio Analysis

 

 

 

 

 

 

 

 

 

 

 

Current ratio

 

 

 

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http://edugen.wiley.com/edugen/art2/common/pixel.gif

 

 

 

 

http://edugen.wiley.com/edugen/art2/common/pixel.gif

 

 

 

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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

 

 

 

 

 

$http://edugen.wiley.com/edugen/art2/common/pixel.gif

 

 

 

http://edugen.wiley.com/edugen/art2/common/pixel.gif

 

 

%

 

 

Inventory

 

 

 

$840,000

 

 

 

 

$600,000

 

 

 

 

 

$http://edugen.wiley.com/edugen/art2/common/pixel.gif

 

 

 

http://edugen.wiley.com/edugen/art2/common/pixel.gif

 

 

%

 

 

Total assets

 

 

 

$3,000,000

 

 

 

 

$2,500,000

 

 

 

 

 

$http://edugen.wiley.com/edugen/art2/common/pixel.gif

 

 

 

http://edugen.wiley.com/edugen/art2/common/pixel.gif

 

 

%

 

 

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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

 

 

 

http://edugen.wiley.com/edugen/art2/common/pixel.gif

 

 

 

http://edugen.wiley.com/edugen/art2/common/pixel.gif

 

 

 

http://edugen.wiley.com/edugen/art2/common/pixel.gif

 

 

 

 

(b) Did Kochheim’s net income as a percent of sales increase, decrease, or remain unchanged over the 3-year period?

 

 

 

Brief Exercise 18-11 (Part Level Submission)

 

The following data are taken from the financial statements of Rainsberger Company.

 

 

 

 

2015

 

 

 

2014

 

 

Accounts receivable (net), end of year

 

 

 

$550,000

 

 

 

$520,000

 

 

Net sales on account

 

 

 

3,960,000

 

 

 

3,100,000

 

 

Terms for all sales are 1/10, n/60.

 

 

 

 

 

 

 

http://edugen.wiley.com/edugen/art2/common/pixel.gif

 

 

http://edugen.wiley.com/edugen/art2/common/pixel.gif

 

 

http://edugen.wiley.com/edugen/art2/common/pixel.gif

 

 

Collapse question part

 

 

(a1)

 

Compute for each year the accounts receivable turnover. At the end of 2013, accounts receivable (net) was $480,000.(Round answers to 1 decimal place, e.g. 1.6.)

 

 

 

 

2015

 

 

 

2014

 

 

Accounts receivable turnover

 

 

 

http://edugen.wiley.com/edugen/art2/common/pixel.gif

 

times

 

 

 

http://edugen.wiley.com/edugen/art2/common/pixel.gif

 

times

 

 

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LINK TO TEXT

 

 

 

(a2)

 

Compute for each year the average collection period. At the end of 2013, accounts receivable (net) was $480,000.(Round answers to 1 decimal place, e.g. 1.6.)

 

 

 

 

2015

 

 

 

2014

 

 

Average collection period

 

 

 

http://edugen.wiley.com/edugen/art2/common/pixel.gif

 

days

 

 

 

http://edugen.wiley.com/edugen/art2/common/pixel.gif

 

days

 

 

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Brief Exercise 18-12 (Part Level Submission)

 

The following data are from the income statements of Haskin Company.

 

 

 

 

2015

 

 

 

2014

 

 

Sales

 

 

 

$6,420,000

 

 

 

 

$6,240,000

 

 

 

Beginning inventory

 

 

 

940,000

 

 

 

 

860,000

 

 

 

Purchases

 

 

 

4,340,000

 

 

 

 

4,661,000

 

 

 

Ending inventory

 

 

 

1,020,000

 

 

 

 

940,000

 

 

 

 

http://edugen.wiley.com/edugen/art2/common/pixel.gif

 

 

Collapse question part

 

 

(a1)

 

Compute for each year the inventory turnover.(Round answers to 1 decimal place, e.g. 1.6.)

 

 

 

 

2015

 

 

 

2014

 

 

Inventory turnover

 

 

 

http://edugen.wiley.com/edugen/art2/common/pixel.gif

 

times

 

 

 

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times

 

 

 

 

 

(a2)

 

Compute for each year the average days to sell the inventory.(Round answers to 1 decimal place, e.g. 1.6.)

 

 

 

 

2015

 

 

 

2014

 

 

Days in inventory

 

 

 

http://edugen.wiley.com/edugen/art2/common/pixel.gif

 

days

 

 

 

http://edugen.wiley.com/edugen/art2/common/pixel.gif

 

days

 

 

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(a1)

 

Attempts: 1 of 3 used

 

 

http://edugen.wiley.com/edugen/art2/common/pixel.gif

 

 

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

 

 

 

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Average assets

 

 

 

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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

 

 

 

http://edugen.wiley.com/edugen/art2/common/pixel.gif

 

%

 

 

 

$600,000

 

 

 

http://edugen.wiley.com/edugen/art2/common/pixel.gif

 

%

 

 

Cost of goods sold

 

 

465,000

 

 

 

http://edugen.wiley.com/edugen/art2/common/pixel.gif

 

%

 

 

 

390,000

 

 

 

http://edugen.wiley.com/edugen/art2/common/pixel.gif

 

%

 

 

Gross profit

 

 

285,000

 

 

 

http://edugen.wiley.com/edugen/art2/common/pixel.gif

 

%

 

 

 

210,000

 

 

 

http://edugen.wiley.com/edugen/art2/common/pixel.gif

 

%

 

 

Selling expenses

 

 

105,000

 

 

 

http://edugen.wiley.com/edugen/art2/common/pixel.gif

 

%

 

 

 

66,000

 

 

 

http://edugen.wiley.com/edugen/art2/common/pixel.gif

 

%

 

 

Administrative expenses

 

 

60,000

 

 

 

http://edugen.wiley.com/edugen/art2/common/pixel.gif

 

%

 

 

 

54,000

 

 

 

http://edugen.wiley.com/edugen/art2/common/pixel.gif

 

%

 

 

Total operating expenses

 

 

165,000

 

 

 

http://edugen.wiley.com/edugen/art2/common/pixel.gif

 

%

 

 

 

120,000

 

 

 

http://edugen.wiley.com/edugen/art2/common/pixel.gif

 

%

 

 

Income before income taxes

 

 

120,000

 

 

 

http://edugen.wiley.com/edugen/art2/common/pixel.gif

 

%

 

 

 

90,000

 

 

 

http://edugen.wiley.com/edugen/art2/common/pixel.gif

 

%

 

 

Income taxes expense

 

 

36,000

 

 

 

http://edugen.wiley.com/edugen/art2/common/pixel.gif

 

%

 

 

 

27,000

 

 

 

http://edugen.wiley.com/edugen/art2/common/pixel.gif

 

%

 

 

Net income

 

 

$84,000

 

 

 

http://edugen.wiley.com/edugen/art2/common/pixel.gif

 

%

 

 

 

$63,000

 

 

 

http://edugen.wiley.com/edugen/art2/common/pixel.gif

 

%

 

 

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Exercise 18-5

 

 

SupposeNordstrom, 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 .)

 

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