Analysts were given the following balance sheet information for the years ended June 30, 2016 and June 30, 2015:
|
Assets |
2016 |
2015 |
|
Cash and Marketable Securities |
$38,104 |
$25,631 |
|
Accounts Receivable |
$342,742 |
$216,708 |
|
Inventory |
$332,760 |
$429,860 |
|
Other Current Assets |
$105,809 |
$85,672 |
|
Total Current Assets |
$819,415 |
$757,871 |
|
Gross Plant and Equipment |
$2,050,368 |
$1,859,234 |
|
Less: Accumulated Depreciation |
($432,560) |
($386,720) |
|
Net Plant and Equipment |
$1,617,808 |
$1,472,514 |
|
Goodwill and Other Assets |
$286,539 |
$312,672 |
|
Total Assets |
$2,723,762 |
$2,543,057 |
|
Liabilities and Equity |
2016 |
2015 |
|
Accounts Payable |
$332,450 |
$389,321 |
|
Notes Payable |
$25,769 |
$35,870 |
|
Accrued Income Taxes |
$42,870 |
$35,680 |
|
Total Current Liabilities |
$401,089 |
$460,871 |
|
Long-Term Debt |
$805,642 |
$701,830 |
|
Total Liabilities |
$1,206,731 |
$1,162,701 |
|
Common Stock |
$100,000 |
$100,000 |
|
Additional Paid-In Capital |
$546,802 |
$546,802 |
|
Retained Earnings |
$870,229 |
$733,554 |
|
Total Common Equity |
$1,517,031 |
$1,380,356 |
|
Total Liabilities and Equity |
$2,723,762 |
$2,543,057 |
In addition, it was reported that the company had a net income of $4,685,213 and that depreciation expenses were equal to $45,840 during 2016.
Construct a 2016 cash flow statement and statement of retained earnings for this firm and include:
1.) net cash from operating activities
2.) net cash used in investing activities
3.) net cash provided by financing activities
In: Accounting
Required information
Use the following information for the Exercises below.
The following selected account balances are provided for Delray
Mfg.
| Sales | $ | 1,136,000 |
| Raw materials inventory, Dec. 31, 2016 | 44,000 | |
| Work in process inventory, Dec. 31, 2016 | 54,100 | |
| Finished goods inventory, Dec. 31, 2016 | 62,400 | |
| Raw materials purchases | 198,300 | |
| Direct labor | 234,000 | |
| Factory computer supplies used | 22,400 | |
| Indirect labor | 51,000 | |
| Repairs—Factory equipment | 5,250 | |
| Rent cost of factory building | 59,000 | |
| Advertising expense | 110,000 | |
| General and administrative expenses | 144,000 | |
| Raw materials inventory, Dec. 31, 2017 | 49,500 | |
| Work in process inventory, Dec. 31, 2017 | 45,200 | |
| Finished goods inventory, Dec. 31, 2017 | 67,900 | |
Exercise 1-14 Income statement preparation LO P2
Prepare an income statement for Delray Mfg. (a manufacturer).
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
In: Accounting
At year-end 2016, Wallace Landscaping’s total assets were $1.9 million, and its accounts payable were $325,000. Sales, which in 2016 were $2.5 million, are expected to increase by 25% in 2017. Total assets and accounts payable are proportional to sales, and that relationship will be maintained. Wallace typically uses no current liabilities other than accounts payable. Common stock amounted to $455,000 in 2016, and retained earnings were $330,000. Wallace has arranged to sell $105,000 of new common stock in 2017 to meet some of its financing needs. The remainder of its financing needs will be met by issuing new long-term debt at the end of 2017. (Because the debt is added at the end of the year, there will be no additional interest expense due to the new debt.) Its net profit margin on sales is 5%, and 35% of earnings will be paid out as dividends.
a. What was Wallace's total long-term debt in 2016? Do not round intermediate calculations. Round your answer to the nearest dollar.
b. What were Wallace's total liabilities in 2016? Do not round intermediate calculations. Round your answer to the nearest dollar.
c. How much new long-term debt financing will be needed in 2017? (Hint: AFN - New stock = New long-term debt.) Do not round intermediate calculations. Round your answer to the nearest dollar.
In: Finance
Raleigh Department Store uses the conventional retail method for
the year ended December 31, 2016. Available information
follows:
The inventory at January 1, 2016, had a retail value of $53,000 and a cost of $36,930 based on the conventional retail method.
Transactions during 2016 were as follows:
| Cost | Retail | |||||
| Gross purchases | $ | 327,870 | $ | 570,000 | ||
| Purchase returns | 6,700 | 18,000 | ||||
| Purchase discounts | 5,800 | |||||
| Gross sales | 568,000 | |||||
| Sales returns | 7,500 | |||||
| Employee discounts | 2,000 | |||||
| Freight-in | 30,500 | |||||
| Net markups | 33,000 | |||||
| Net markdowns | 18,000 | |||||
Sales to employees are recorded net of discounts.
The retail value of the December 31, 2017, inventory was $61,880, the cost-to-retail percentage for 2017 under the LIFO retail method was 70%, and the appropriate price index was 104% of the January 1, 2017, price level.
The retail value of the December 31, 2018, inventory was $53,500, the cost-to-retail percentage for 2018 under the LIFO retail method was 69%, and the appropriate price index was 107% of the January 1, 2017, price level.
Required:
1. Estimate ending inventory for 2016 using the
conventional retail method.
2. Estimate ending inventory for 2016 assuming
Raleigh Department Store used the LIFO retail method.
3. Assume Raleigh Department Store adopts the
dollar-value LIFO retail method on January 1, 2017. Estimating
ending inventory for 2017 and 2018.
In: Accounting
QUESTION 2
DISPOSAL OF FIXED ASSETS
(20)
REQUIRED
Answer the following questions from the information given below.
All workings must be shown.
2.1
Calculate the depreciation for the current financial year on the
vehicle that was sold.
(2)
2.2
Prepare the Fixed Asset Realisation account in the general ledger
to reflect the disposal of the vehicle on 31 August 2016.
(4)
2.3
Calculate the depreciation for the current financial year on the
new vehicle acquired.
(2)
2.4
Calculate the total cost price of the vehicles on 28 February
2017.
(2)
2.5
Prepare the Accumulated Depreciation on Vehicles account in the
general ledger to reflect all the entries up to the end of the
financial year.
(5)
2.6
Prepare the following note to the financial statements (amount
column for Vehicles only) as at 28 February 2017:
Property, plant and equipment
(5)
INFORMATION
Steers Enterprises owns a fleet of motor vehicles. The following
balances appeared in the general ledger on 01 March 2016, the
beginning of the financial year:
Vehicles at cost
Accumulated depreciation on vehicles
R1 000 000
R400 000
Additional information
■
On 31 August 2016, a vehicle that cost R200 000 was sold for R32
000 cash. The accumulated depreciation on this vehicle was R165 000
on 01 March 2016.
■
On 01 December 2016 a new vehicle was purchased for R250 000
cash.
■
Deprecation is provided for on vehicles at 20% per annum on the
diminishing balance.
In: Accounting
At year-end 2016, Wallace Landscaping’s total assets were $1.0 million, and its accounts payable were $375,000. Sales, which in 2016 were $2.3 million, are expected to increase by 30% in 2017. Total assets and accounts payable are proportional to sales, and that relationship will be maintained. Wallace typically uses no current liabilities other than accounts payable. Common stock amounted to $390,000 in 2016, and retained earnings were $210,000. Wallace has arranged to sell $85,000 of new common stock in 2017 to meet some of its financing needs. The remainder of its financing needs will be met by issuing new long-term debt at the end of 2017. (Because the debt is added at the end of the year, there will be no additional interest expense due to the new debt.) Its net profit margin on sales is 5%, and 55% of earnings will be paid out as dividends.
In: Finance
The information on the following page was obtained from the records of Breanna, Inc.:
| Accounts receivable | $ | 10,200 |
| Accumulated depreciation | 50,900 | |
| Cost of goods sold | 124,000 | |
| Income tax expense | 9,000 | |
| Cash | 61,000 | |
| Sales | 196,000 | |
| Equipment | 124,000 | |
| Selling, general, and administrative expenses | 31,000 | |
| Common stock (9,100 shares) | 95,000 | |
| Accounts payable | 11,900 | |
| Retained earnings, 1/1/16 | 23,500 | |
| Interest expense | 5,400 | |
| Merchandise inventory | 38,400 | |
| Long-term debt | 39,000 | |
| Dividends declared and paid during 2016 | 13,300 | |
Except as otherwise indicated, assume that all balance sheet items reflect account balances at December 31, 2016, and that all income statement items reflect activities that occurred during the year ended December 31, 2016. There were no changes in paid-in capital during the year.
Required:
a. Prepare an income statement and statement of changes in stockholders' equity for the year ended December 31, 2016, and a balance sheet at December 31, 2016, for Breanna, Inc. Based on the financial statements that you have prepared for part a, answer the questions in parts b-e.
b. What is the company's average income tax rate?
c. What interest rate is charged on long-term debt?
d. What is the par value per share of common stock?
e. What is the company's dividend policy (i.e., what proportion of the company's earnings are used for dividends)?
In: Accounting
Problem 12-05 Long-Term Financing Needed At year-end 2016, Wallace Landscaping’s total assets were $1.7 million, and its accounts payable were $350,000. Sales, which in 2016 were $2.8 million, are expected to increase by 30% in 2017. Total assets and accounts payable are proportional to sales, and that relationship will be maintained. Wallace typically uses no current liabilities other than accounts payable. Common stock amounted to $405,000 in 2016, and retained earnings were $235,000. Wallace has arranged to sell $90,000 of new common stock in 2017 to meet some of its financing needs. The remainder of its financing needs will be met by issuing new long-term debt at the end of 2017. (Because the debt is added at the end of the year, there will be no additional interest expense due to the new debt.) Its net profit margin on sales is 3%, and 40% of earnings will be paid out as dividends. a. What was Wallace's total long-term debt in 2016? Do not round intermediate calculations. Round your answer to the nearest dollar. $ b. What were Wallace's total liabilities in 2016? Do not round intermediate calculations. Round your answer to the nearest dollar. $ c. How much new long-term debt financing will be needed in 2017? (Hint: AFN - New stock = New long-term debt.) Do not round intermediate calculations. Round your answer to the nearest dollar. $
In: Finance
At year-end 2016, Wallace Landscaping’s total assets were $1.7 million, and its accounts payable were $415,000. Sales, which in 2016 were $2.2 million, are expected to increase by 30% in 2017. Total assets and accounts payable are proportional to sales, and that relationship will be maintained. Wallace typically uses no current liabilities other than accounts payable. Common stock amounted to $415,000 in 2016, and retained earnings were $315,000. Wallace has arranged to sell $95,000 of new common stock in 2017 to meet some of its financing needs. The remainder of its financing needs will be met by issuing new long-term debt at the end of 2017. (Because the debt is added at the end of the year, there will be no additional interest expense due to the new debt.) Its net profit margin on sales is 8%, and 60% of earnings will be paid out as dividends.
In: Finance
At year-end 2016, Wallace Landscaping’s total assets were $1.6 million, and its accounts payable were $330,000. Sales, which in 2016 were $2.9 million, are expected to increase by 25% in 2017. Total assets and accounts payable are proportional to sales, and that relationship will be maintained. Wallace typically uses no current liabilities other than accounts payable. Common stock amounted to $480,000 in 2016, and retained earnings were $255,000. Wallace has arranged to sell $200,000 of new common stock in 2017 to meet some of its financing needs. The remainder of its financing needs will be met by issuing new long-term debt at the end of 2017. (Because the debt is added at the end of the year, there will be no additional interest expense due to the new debt.) Its net profit margin on sales is 4%, and 45% of earnings will be paid out as dividends.
What was Wallace's total long-term debt in 2016? Do not round intermediate calculations. Round your answer to the nearest dollar.
What were Wallace's total liabilities in 2016? Do not round intermediate calculations. Round your answer to the nearest dollar.
How much new long-term debt financing will be needed in 2017? (Hint: AFN - New stock = New long-term debt.) Do not round intermediate calculations. Round your answer to the nearest dollar.
In: Finance