Question
In: Accounting
A) You are provided with the balance sheet and income statement of the Neuman Corporation: Construct...
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A) |
You are provided with the balance sheet and income statement of the Neuman Corporation: |
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Construct a cash flow statement for the year ended Dec 31, 2008. Note that this company has also paid dividends on the common stock, but you need to |
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find out how much by yourself. Hint: take a look at retained earnings. The company had no preferred stock (50% of exam grade) |
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BALANCE SHEET |
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ASSETS |
2007 |
2008 |
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Cash |
45,000 |
50,000 |
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Marketable Securities |
275,000 |
160,000 |
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Accounts Receivable |
240,000 |
220,000 |
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Inventories |
230,000 |
275,000 |
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Investments in other companies (long-term, obviously J) |
70,000 |
65,000 |
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Plant & Equipment |
1,400,000 |
1,550,000 |
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Accumulated depreciation |
-450,000 |
-600,000 |
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Net Plant & Equipment |
950,000 |
950,000 |
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Total Assets |
1,810,000 |
1,720,000 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Accounts Payable |
310,000 |
85,000 |
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Notes Payable (due next month) |
65,000 |
10,000 |
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Accrued Expenses |
30,000 |
5,000 |
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Income tax payable |
5,000 |
10,000 |
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Bonds payable (due in 2020) |
800,000 |
900,000 |
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Common stock (100,000 shares in 2007, 1$ par) |
100,000 |
105,000 |
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Capital paid-in in excess of par |
100,000 |
105,000 |
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Retained earnings |
400,000 |
500,000 |
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Total L+SE |
1,810,000 |
1,720,000 |
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INCOME STATEMENT |
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Sales |
5,500,000 |
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Less: Cost of Goods Sold |
4,300,000 |
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Gross profit |
1,200,000 |
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Less: Selling and Administrative Expenses |
230,000 |
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Less: Depreciation expense |
150,000 |
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Earnings Before Interest and Taxes |
820,000 |
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Less: Interest expense |
70,000 |
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Earnings Before Taxes |
750,000 |
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Less: Taxes (at 50%) |
375,000 |
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Net Income |
375,000 |
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Calculate the requested ratio below for the company for the 2008, make sure you write down the formula |
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Current ratio |
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The industry average is written below. Is Neuman doing better or worse than the industry? You need to write only one word |
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0.7 times |
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What does this ratio show? How is it interpreted? |
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Calculate the requested ratio below for the company for the 2008, make sure you write down the formula |
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Times Interest Earned Ratio |
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The industry average is written below. Is Neuman doing better or worse than the industry? You need to write only one word |
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6 times |
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What does this ratio show? How is it interpreted? |
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Solutions
Expert Solution
| Cash flow statement : Indirect Method | Ledger Working | ||||||||
| Cash flows from operating activities: | Working | Amount $ | Retained earning A/C | ||||||
| Profit before tax | $ 750,000.00 | 2008 | Opening balance | $ 400,000.00 | |||||
| Adjustments: | 2008 | Dividend paid | $ 275,000.00 | 2008 | Net income | $ 375,000.00 | |||
| Depreciation | $ 150,000.00 | 2008 | Closing balance | $ 500,000.00 | |||||
| Interest expense | $ 70,000.00 | ||||||||
| $ 775,000.00 | $ 775,000.00 | ||||||||
| Operating profit from before working capital changes | $ 970,000.00 | Building | |||||||
| Accounts receivable (increase)/decrease | $ 20,000.00 | 2008 | Opening balance | $ 1,400,000.00 | |||||
| Marketable securities (increase)/decrease | $ 115,000.00 | 2008 | Addition to Plant assets | $ 150,000.00 | 2008 | Sale of asset | $ - | ||
| Inventory(increase)/decrease | $ (45,000.00) | ||||||||
| Account payable (decrease)/increase | $ (225,000.00) | 2008 | Closing balance | $ 1,550,000.00 | |||||
| Notes payable (decrease)/increase | $ (55,000.00) | $ 1,550,000.00 | $ 1,550,000.00 | ||||||
| Accrued expenses (decrease)/increase | $ (25,000.00) | ||||||||
| Income tax payable (decrease)/increase | $ 5,000.00 | ||||||||
| Cash generation from operation | $ 760,000.00 | Accumulated depreciation | |||||||
| Income tax paid ($5,000+$375,000-$10,000) | $ (370,000.00) | 2008 | Opening balance | $ 450,000.00 | |||||
| Net cash provided by operating activities | $ 390,000.00 | 2008 | P&L | $ 150,000.00 | |||||
| Cash flows from investing activities: | 2018 | Closing balance | $ 600,000.00 | ||||||
| Net proceeds/(Purchase) of Investment | $ 5,000.00 | $ 600,000.00 | $ 600,000.00 | ||||||
| Net proceeds/(Purchase) of Equipment | $ (150,000.00) | ||||||||
| Net cash used in investing activities | $ (145,000.00) | ||||||||
| 2008 | |||||||||
| Cash flows from financing activities: | |||||||||
| Current ratio = Current asset/current liabilities | |||||||||
| Net proceeds/(Repayment))of Bond payable | $ 100,000.00 | Current ratio = (50000+160000+220000+275000)/(85000+10000+5000+10000) | |||||||
| Net proceeds/(Repayment))of Issue of Common Equity stock | $ 5,000.00 | Current ratio = 705000/110000= 6.41 | Better | ||||||
| Interest paid | $ (70,000.00) | ||||||||
| Dividend paid | $ (275,000.00) | Times interest earned=Operating income(EBIT)/interest expense | |||||||
| Net cash provided by financing activities | $ (240,000.00) | Times interest earned=$8,20,000/70,000= 11.71 | Better | ||||||
| Net increase in cash | $ 5,000.00 | ||||||||
| Opening Cash balance, Jan 2008 | $ 45,000.00 | ||||||||
| Closing Cash balance, Dec 2008 | $ 50,000.00 | ## | |||||||
 ekkarill92 answered 2 years agoRelated SolutionsA) You are provided with the balance sheet and income statement of the Neuman Corporation: Construct...
A)
You are provided with the balance sheet and income statement of
the Neuman Corporation:
Construct a cash flow statement for the year ended Dec 31, 2008.
Note that this company has also paid dividends on the common stock,
but you need to
find out how much by yourself. Hint: take a look at retained
earnings. The company had no preferred stock (50% of exam
grade)
BALANCE SHEET
ASSETS
2007
2008
Cash
45,000
50,000
Marketable Securities
275,000
160,000
Accounts Receivable...
4) Using the balance sheet from #3, construct an income statement and balance sheet for ...
4) Using the balance sheet from #3, construct an income
statement and balance sheet for
the first month of operation, given the
following information:
Sales
$104,000.00
Collections
$77,000.00
Purchases (paid for half)
$60,000.00
Ending inventory
$57,000.00
Equipment Depreciation
$18,000.00
Vehicle Depreciation
$2,000.00
Heat (due next month)
$450.00
Electricity
$325.00
Telephone
$230.00
Advertising
$1,200.00
Salaries
$15,500.00
Payroll Tax Expense
$1,700.00
Office Supplies
$200.00
Insurance (due next month)
$1,250.00
Loan payment
$3,500.00
principal
$1,500.00
interest
$2,000.00
Legal fees...
FINANCIAL STATEMENTS The Davidson Corporation's balance sheet and income statement are provided here. Davidson Corporation: Balance...FINANCIAL STATEMENTS
The Davidson Corporation's balance sheet and income statement
are provided here.
Davidson Corporation: Balance Sheet as of
December 31, 2016
(Millions of Dollars)
Assets
Liabilities and Equity
Cash and equivalents
$10
Accounts payable
$140
Accounts receivable
495
Accruals
250
Inventories
920
Notes payable
230
Total current assets
$1,425
Total current liabilities
$620
Net plant and equipment
2,455
Long-term bonds
1,480
Total liabilities
$2,100
Common stock (100 million shares)
280
Retained...
construct an income statement and balance sheet for the first month of operation, given the...
construct an income statement and balance sheet for
the first month of operation, given the
following information:
Sales
$104,000.00
Collections
$77,000.00
Purchases (paid for half)
$60,000.00
Ending inventory
$57,000.00
Equipment Depreciation
$18,000.00
Vehicle Depreciation
$2,000.00
Heat (due next month)
$450.00
Electricity
$325.00
Telephone
$230.00
Advertising
$1,200.00
Salaries
$15,500.00
Payroll Tax Expense
$1,700.00
Office Supplies
$200.00
Insurance (due next month)
$1,250.00
Loan payment
$3,500.00
principal
$1,500.00
interest
$2,000.00
Legal fees (due next month)
$500.00
Accounting
$250.00
Vehicle...
You have been provided with the Balance Sheet and Income Statement for OSR Pty Ltd as...You have been provided with the Balance Sheet and Income
Statement for OSR Pty Ltd as at 30 June 2020 with 2019 comparatives
to prepare an analysis for the performance of OSR Pty Ltd:
OSR Pty Ltd
Account Balance
As at 30 June
2020
2019
Assets
$
$
Cash
$30,000
$19,200
Accounts receivable
$49,200
$44,100
Inventory
$84,000
$82,800
Property, plant and equipment
$312,000
$312,000
Total Assets
$475,200
$458,100
Liabilities
Accounts Payable
$57,000
$67,200
Mortgage payable
$120,000
$120,000
Total Liabilites
$177,000...
The balance sheet and income statement for Cruise Corporation are as follows:The balance sheet and income statement for Cruise Corporation
are as
follows:
Balance Sheet as of December 31,
2020
ASSETS
LIABILITIES &
EQUITY
Cash & marketable securities $2,000
Accounts
payable
$30,000
Accounts
Receivable
35,000
Taxes
payable
9,000
Inventory
15,000
Short-term
borrowings
12,000
Total current
assets
$52,000
Total current
liabilities
$51,000
Net P,P &
E
$448,000 Long-term
debt
$200,000
TOTAL
ASSETS
$500,000 Total
liabilities
$251,000
Common stock at
par
$80,000
Additional paid-in capital
$30,000
Retained
earnings
$139,000
TOTAL LIABILITIES &
EQUITY ...
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Determine the amount of financing they will need to raise in the
capital markets. Remember to calculate subtotals for operating
activities, investing activities and financing activities.
Laguna Surf Board 2015
Income Statement
$M
Sales
700
Less COGS
400
Gross Profit
300
Depreciation
40
Operating Expenses
105
EBIT (Operating Profit)
155
Interest
25
EBT (Pretax Income)
130
Taxes
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Describe the information provided by each of these financial statements: Income Statement, Balance Sheet, Statement of...Describe the information provided by each of these financial
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financial statement (or statements) would be most helpful in
answering the question, and why.
Identify ten business questions that can be answered by using
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USE THE FOLLOWING INFORMATION TO CONSTRUCT AN INCOME STATEMENT AND BALANCE SHEET FOR 2011. ASSUME THE...USE THE FOLLOWING INFORMATION TO CONSTRUCT AN INCOME STATEMENT
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ITEM
2010
2011
SALES
10,000
12,000
DEPRECIATION
3,000
3,000
COST OF GOODS SOLD
2,000
2,000
OTHER EXPENSES
3,000
4,000
INTEREST
1,000
1,000
CASH
1,000
1,000
ACCOUNTS RECEIVABLE
3,000
3,000
S.T. NOTES PAYABLE
1,000
1,000
L.T. DEBT
10,000
11,000
NET FIXED ASSETS
20,000
20,000
ACCOUNTS PAYABLE
2,000
2,000
INVENTORY
3,000
3,000
DIVIDENDS
600
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Given the following information please construct a balance sheet and an income statement for the company....Given the following information please construct a balance sheet
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All information in $000
Total
Revenues
5,374
Cash
908
Common
Stock
651
Cost of Revenues
Subscription
925
Interest Expense
16
Additional Paid in
Capital
3,954
Retained
Earnings
(630)
Cost of Revenues Professional Services
365
Gross Margin
4,084
Short term
securities
87
Long term
debt
2,328
Accounts
Receivable ...
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