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Accounting Problems with Correct Solution




Question;1) Building a Balance Sheet Bishop, Inc., has current assets of $5,700, net fixed assets of $27,000, current liabiities of $4,400, and long-term debt of $12,900. What is the value of the shareholders equity account for this firm? How much is net working capital?;3) Market Values and Book Values Klingon Cruisers, Inc., purchased new cloaking machinery three years ago for $9.5 million. The machinery can be sold to the Romulans today for $6.5 million. Klingon?s current balance sheet shows net fixed assets of $5.2 million, current liabiities of $2.4 million, and net working capital of $800,000. If all the current assets were liquidated today, the company would receive $2.6 million cash. What is the book value of Klingon?s assets today? What is the market value?;4) Calculating Taxes The Locker Co. had $273,000 in taxable income. Using the rates from Table 2.3 in the chapter, calculate the company?s income taxes. What is the average tax rate? What is the marginal tax rate?;problem 4 table;Taxable Income Tax Rate;$ 0? 50,000 15%;50,001? 75,000 25;75,001? 100,000 34;100,001? 335,000 39;335,001?10,000,000 34;10,000,001?15,000,000 35;15,000,001?18,333,333 38;18,333,3341 35;8) The 2011 balance sheet of Anna?s Tennis Shop, Inc.;showed long-term debt of $1.45 million, and the 2012 balance sheet showed long-term debt of $1.52 million. The 2012 income statement showed an interest expense of $127,000. What was the firm?s cash flow to creditors during 2012?;13) Building an Income Statement During the year, the Senbet Discount Tire Company had gross sales of $1.06 million. The firm?s cost of goods sold and selling expenses were $525,000 and $215,000, respectively. Senbet also had notes payable of $800,000. These notes carried an interest rate of 7 percent. Depreciation was $130,000. Senbet?s tax rate was 35 percent. a. What was Senbet?s net income? b. What was Senbet?s operating cash flow?;21) Calculating Cash Flows Consider the following abbreviated financial statements for Weston Enterprises;WESTON ENTERPRISES;2011 and 2012 Partial Balance Sheets;Assets Liabilities and Owners? Equity;2011 2012 2011 2012;Current assets $936 $1,015 Current liabilities $382 $416;Net fixed assets 4,176 4,896 Long-term debt 2,160 2,477;WESTON ENTERPRISES;2012 Income Statement;Sales------------$12,380;Costs------------ 5,776;Depreciation--- 1,150;Interest paid--- 314;a.What is owners? equity for 2011 and 2012?;b. What is the change in net working capital for 2012?;c. In 2012, Weston Enterprises purchased $2,160 in new fixed assets. How much in fixed assets did Weston Enterprises sell? What is the cash flow from assets for the year? (The tax rate is 40 percent.);d. During 2012, Weston Enterprises raised $432 in new long-term debt. How much long-term debt must Weston Enterprises have paid off during the year? What is the cash flow to creditors?;22) Financial Statements Draw up an income statement and balance sheet for this company for 2011 and 2012.;2011 2012;Sales $ 7,835 $ 8,409;Depreciation 1,125 1,126;Cost of goods sold 2,696 3,060;Other expenses 639 534;Interest 525 603;Cash 4,109 5,203;Accounts receivable 5,439 6,127;Short-term notes payable 794 746;Long-term debt 13,460 16,050;Net fixed assets 34,455 35,277;Accounts payable 4,316 4,185;Inventory 9,670 9,938;Dividends 956 1,051


Paper#43323 | Written in 18-Jul-2015

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