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Acct504 exam questions

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Question;CO A) Below you will find selected information (in millions) from Coca-Cola Co.?s 2012 Annual Report:Income Taxes Payable$471Short-term Investments and Marketable Securities8,109Cash8,442Other non-current Liabilities10,449Common Stock1,760Receivables4,812Other Current Assets2,973Long-term Investments10,448Other Non-current Assets3,585Property, Plant and Equipment23,486Trademarks6,527Other Intangible Assets20,810Allowance for Doubtful Accounts53Accumulated Depreciation9,010Accounts Payable8,680Short Term Notes Payable17,874Prepaid Expenses2,781Other Current Liabilities796Long-Term Liabilities14,736Paid-in-Capital in Excess of Par Value11,379Retained Earnings55,038Inventories3,264Treasury Stock35,009Other information taken from the Annual Report:Sales Revenue for 2012$48,017Cost of Goods Sold for 2012 19,053Net Income for 2012 9,019Inventory Balance on 12/31/11 3,092Net Accounts Receivable Balance on 12/31/11 4,920Total Assets on 12/31/11 79,974Equity Balance on 12/31/11 31,921Required:1. Using the information provided prepare a Balance Sheet. Separate the current assets from non-current assets and provide a total for each. Also separate the current liabilities from the non-current liabilities and provide a total for each.2. Using the Balance Sheet from your answer above calculate, Current Ratio, Days in Inventory, Average Collection Period, Return on Assets Ratio, Debt to Total Assets and Return on common stockholders? equity ratio. (Make sure to show all your work)(Points: 36) 2.(TCO B) The following selected data was retrieved from the Wal-Mart, Inc. financial statements for the year ending January 31, 2013:Accounts Payable$38,080Accounts Receivable6,768Cash7,781Common Stock3,952Cost of Goods Sold352,488Income Tax Expense7,981Interest Expenses2,064Membership Revenues3,048Net Sales466,114Operating, Selling and Administrative Expenses88,873Retained Earnings72,978Required:Using the information provided above:1. Prepare a multiple-step income statement2. Calculate the Profit Margin, and Gross profit rate for the company. Be sure to provide the formula you are using, show your calculations, and discuss your findings/results.(Points: 36) 3.(TCO C) Please review the following real-world Hewlett Packard Statement of Cash flows and address the 2 questions below:Cash flow from operating activitiesIn millionsIn millionsFor the year ended 2012For the year ended 2011Net (loss) earnings$(12,650)$7,074Depreciation and amortization5,0954,984Impairment of goodwill and purchased intangible assets18,035885Stock-based compensation expense635685Provision for doubtful accounts14281Provision for inventory277217Restructuring charges2,266645Deferred taxes on earnings(711)166Excess tax benefit from stock-based competition(12)(163)Other, net265(46)Accounts and financing receivables1,269(227)Inventory890(1,252)Accounts payable(1,414)275Taxes on earnings(320)610Restructuring(840)(1,002)Other assets and liabilities(2,356)(293)Net cash provided by operating activities10,57112,639Cash flows from investing activities:Investment in property, plant, and equipment(3,706)(4,539)Proceeds from sale of property, plant, and equipment617999Purchases of available-for-sale securities and other investments(972)(96)Maturities and sales of available-for-sale securities and other investment66268Payments in connection with business acquisitions, net of cash acquired(141)(10,480)Proceeds from business divestiture, net8789Net cash used in investing activities(3,453)(13,959)Cash flow from financing activities:(Payments) issuance of commercial paper and notes payable, net(2,775)(1,270)Issuance of debt5,15411,942Payment of debt(4,333)(2,336)Issuance of common stock under employee stock plans716896Repurchase of common stock(1,619)(10,117)Excess tax benefit from stock-based compensation12163Cash dividends paid(1,015)(844)Net cash used in financing activities(3,860)(1,566)Increase (decrease) in cash and cash equivalents3,258(2,886)Cash and cash equivalents at beginning of period8,04310,929Cash and cash equivalents at end of period$11,301$8,043 Required:1) Please calculate the percentage increase or decrease in cash for the operating, investing, and financing sections and explain the major reasons for the increase or decrease for each of these sections.2) Please calculate the free cash flow for 2012 and explain the meaning of this ratio.(Points: 36) 4.(TCO D) You are CFO of Goforit, Inc., a wholesale distribution company specializing in emerging technologies. Your CEO is a brilliant marketer, but relies on you to explain issues and choices in accounting and finance. She has heard from other members of a CEO organization to which she belongs that a company?s net income can vary widely depending on which accounting choices are made from the ?GAAP menu.? Assuming the goal is to maximize net income, choose an accounting treatment from each of the following scenarios, and explain to your CEO why the choice will produce the desired effect on reported Net Income for the current year. Include in your answer the effect of the choice on both the income statement and balance sheet. Required:a. Goforit carries significant electronics inventory in a competitive environment where prices are actually falling. Which inventory valuation method would you choose?LIFO, FIFO, or average cost? Assume that unit purchases exceed unit sales.b. Goforit has a large investment in warehouse equipment including conveyor belts, forklifts, and automated packaging systems. Which depreciation method would you choose: Straight line (SL) or double declining balance (DDB)?(Points: 36) 5.(TCO F) Please review the following real-world ratios for Johnson & Johnson and Pfizer for the year ended 2012 and address the 2 questions below.Ratio NameJohnson & JohnsonPfizerProfit margin16.1%24.7%Inventory turnover ratio3.11.7Average collection period59.4 days69.1 daysCash debt coverage ratio.27.16Debt to Total assets46.6%127.5% Required:1) Please explain the meaning of each of the Pfizer ratios above.2) Please state which company performed better for each ratio.(Points: 36)

 

Paper#50637 | Written in 18-Jul-2015

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