Accounting problem | Accounting homework help

Complete the following problem sets of Financial Accounting: (P2-6A) & (P13-2A)

 

P2-6A

 

Condensed balance sheet and income statement data for Sadecki Corporation are presented here and on the next page.

Compute and interpret liquidity, solvency, and profitability ratios.

(LO 2, 4, 5), AP

SADECKI CORPORATION

Balance Sheets

December 31

Assets

  2014    

  2013    

Cash

$ 28,000

$ 20,000

Receivables (net)

70,000

62,000

Other current assets

90,000

73,000

Long-term investments

62,000

60,000

Property, plant, and equipment (net)

 510,000

 470,000

Total assets

$760,000

$685,000

Liabilities and Stockholders’ Equity

 

 

Current liabilities

$ 75,000

$ 70,000

Long-term liabilities

80,000

90,000

Common stock

330,000

300,000

Retained earnings

 275,000

 225,000

Total liabilities and stockholders’ equity

$760,000

$685,000

 

SADECKI CORPORATION

Income Statements

For the Years Ended December 31

 

  2014    

  2013    

Sales revenue

$750,000

$680,000

Cost of goods sold

440,000

400,000

Operating expenses (including income taxes)

 240,000

 220,000

Net income

$ 70,000

$ 60,000

           

Additional information:

Net cash provided by operating activities

$82,000

$56,000

Cash used for capital expenditures

$45,000

$38,000

Dividends paid

$20,000

$15,000

Average number of shares outstanding

33,000

30,000

Instructions

Compute these values and ratios for 2013 and 2014.

·       (a) Earnings per share.

·       (b) Working capital.

·       (c) Current ratio.

·       (d) Debt to assets ratio.

·       (e) Free cash flow.

·       (f) Based on the ratios calculated, discuss briefly the improvement or lack thereof in financial position and operating results from 2013 to 2014 of Sadecki Corporation.

 

 

 

P13-2A

The comparative statements of Osborne Company are presented here.

Compute ratios from balance sheets and income statements.

(LO 6), AP

            OSBORNE COMPANY

Income Statements

For the Years Ended December 31

 

   2014   

   2013   

Net sales

$1,890,540

$1,750,500

Cost of goods sold

 1,058,540

 1,006,000

Gross profit

832,000

744,500

Selling and administrative expenses

  500,000

  479,000

Income from operations

332,000

265,500

Other expenses and losses

 

 

Interest expense

   22,000

   20,000

Income before income taxes

310,000

245,500

Income tax expense

   92,000

   73,000

Net income

$  218,000

$  172,500

 

OSBORNE COMPANY

Balance Sheets

December 31

Assets

   2014   

   2013   

Current assets

 

 

  Cash

$  60,100

$ 64,200

  Debt investments (short-term)

74,000

50,000

  Accounts receivable

117,800

102,800

  Inventory

  126,000

 115,500

    Total current assets

377,900

332,500

Plant assets (net)

  649,000

 520,300

Total assets

$1,026,900

$852,800

           

 

Liabilities and Stockholders’ Equity

 

 

Current liabilities

 

 

  Accounts payable

$ 160,000

$145,400

  Income taxes payable

   43,500

  42,000

    Total current liabilities

   203,500

  187,400

Bonds payable

 220,000

 200,000

    Total liabilities

 423,500

 387,400

Stockholders’ equity

 

 

  Common stock ($5 par)

   290,000

  300,000

  Retained earnings

  313,400

  165,400

    Total stockholders’ equity

  603,400

  465,400

Total liabilities and stockholders’ equity

$1,026,900

$852,800

All sales were on account. Net cash provided by operating activities for 2014 was $220,000. Capital expenditures were $136,000, and cash dividends were $70,000.

 

Instructions

Compute the following ratios for 2014.

·       (a) Earnings per share.

·       (b) Return on common stockholders’ equity.

·       (c) Return on assets.

·       (d) Current ratio.

·       (e) Accounts receivable turnover.

·       (f) Average collection period.

·       (g) Inventory turnover.

·       (h) Days in inventory.

·       (i) Times interest earned.

·       (j) Asset turnover.

·       (k) Debt to assets.

·       (l) Current cash debt coverage.

·       (m) Cash debt coverage.

·       (n) Free cash flow.

 

"We Offer Paper Writing Services on all Disciplines, Make an Order Now and we will be Glad to Help"