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Accounting Three Misc Problem Questions




Question;E14-3The comparative condensed balance sheets of Conard Corporation are presented below. CONARD CORPORATION Comparative Condensed Balance Sheets December 31 2012 2011AssetsCurrent assets $ 74,000 $ 80,000Property, plant, and equipment (net) 99,000 90,000Intangibles 27,000 40,000Total assets $200,000 $210,000Liabilities and stockholders? equityCurrent liabilities $ 42,000 $ 48,000Long-term liabilities 143,000 150,000Stockholders? equity 15,000 12,000Total liabilities and stockholders? equity $200,000 $210,000Instructions(a) Prepare a horizontal analysis of the balance sheet data for Conard Corporation using 2011 as a base.(b) Prepare a vertical analysis of the balance sheet data for Conard Corporation in columnar form for 2012.E13-8 Here are comparative balance sheets for Taguchi Company. TAGUCHI COMPANY Comparative Balance Sheets December 31Assets 2011 2010Cash $ 73,000 $ 22,000Accounts receivable 85,000 76,000Inventories 170,000 189,000Land 75,000 100,000Equipment 260,000 200,000Accumulated depreciation (66,000) (32,000) Total $597,000 $555,000Liabilities and Stockholders? EquityAccounts payable $ 39,000 $ 47,000Bonds payable 150,000 200,000Common stock ($1 par) 216,000 174,000Retained earnings 192,000 134,000Total $597,000 $555,000Additional 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.InstructionsPrepare a statement of cash flows for 2011 using the indirect method.Access the information contained in Riordan Manufacturing?s balance sheet and income statement to calculate the following:? Liquidity ratioso Current ratioo Acid-test, or quick, ratioo Receivables turnover o Inventory turnover? Profitability ratioso Asset turnovero Profit margino Return on assetso Return on common stockholders? equity? Solvency ratioso Debt to total assetso Times interest earnedShow your calculations for each ratio.Create a horizontal and vertical analysis for the balance sheet and the income statement.Write a 350- to 700-word memo to the CEO of your selected organization in which you discuss your findings from your ratio calculations and your horizontal and vertical analysis. In your memo, address the following questions:? What do the liquidity, profitability, and solvency ratios reveal about the financial position of the company?? Which users may be interested in each type of ratio?? What does the collected data reveal about the performance and position of the company? Riordan Manufacturing, Inc. Consolidated Balance Sheet Fiscal Year Ending September 30th 2011 2010 AssetsCurrent Assets Cash $3,725,406 $2,807,029 Accounts Receivable 3,192,094 2,695,342 Current Portion of Notes Receivable 84,255 102,976 Inventories 9,709,611 8,517,203 Prepaid Expenses and Other Items 666,591 402,240Total Current Assets $17,377,957 $14,524,790Notes Receivable, less current portion $842,551 $936,168Investment in Joint Venture 1,734,004 1,609,004Property, Plant and Equipment - net 26,366,949 16,658,218Intangible Assets - net 904,473 904,473Other Assets 183,203 192,845Total Assets $47,409,137 $34,825,498 Liabilities and Stockholders' EquityCurrent Liabilities Current Portion of Long-Term Debt $1,560,959 $474,032 Accounts Payable 1,141,561 1,391,385 Accrued Liabilities 430,477 524,685 Income Taxes Payable 552,155 359,955Total Current Liabilities $3,685,152 $2,750,057Bank Line of Credit $114,759 $295,865Long-Term Debt - less current portion 9,500,741 1,006,955Deferred Income Taxes - net 660,503 825,629Total Liabilities $13,961,155 $4,878,506Common StockStated par value is $.01.20,000,000 shares authorized.Issued and Outstanding 15,801,332 net of treasury shares.$29,055,488 $29,055,488Retained Earnings / (Accumulated Deficit) 4,392,494 891,504Total Stockholders' Equity $33,447,982 $29,946,992Total Liabilities and Stockholders' Equity $47,409,137 $34,825,498 Riordan Manufacturing, Inc. Income Statement For the 12 months ending September 30th 2011 2010Sales $66,608,660 $56,534,254Direct Cost of Goods Sold 51,592,470 43,970,250Gross Margin $15,016,190 $12,564,004 Operating ExpensesSales, Marketing & Other $1,328,615 $ 1,265,348Depreciation 1,378,616 1,152,125Quality Assurance 1,151,176 1,112,247Research & Development 1,039,637 962,627General & Administrative 4,954,751 4,674,293Machining & Systems 143,808 125,050Total Operating Expenses $9,996,603 $9,291,690 Profit Before Interest & Taxes $5,019,587 $3,272,314 Non-Operating ExpensesInterest Expense $ 604,616 $ 121,533Taxes 1,104,309 719,909 Total Non-Operating Expenses $1,708,925 $ 841,442 Net Profit After Taxes $3,310,662 $2,430,872


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