#1. Vista Corp. bought a piece of new equipment at the beginning of the year at a cost of $32,500. The equipment's estimated useful life is 4 years and the residual value is $2,500. The estimated production that is expected from the equipment over its useful life is 100,000 units. Expected annual production is: Year 1 3 0,000 units Year 2 40,000 units Year 3 20,000 units Year 4 10,000 units a.) Use the Units of Production depreciation method to compute the Depreciation Expense and Book Value for this new equipment for each of the four years of its useful life (your answer must include 8 amounts and the calculations to support them). Year Computation Book Value Depreciation Expense Accumulated Depreciation b.) Using your answer to part a.) above, calculate the Gain or Loss that Vista Corp. would report on its income statement if it sold the equipment at the end of the third year for $5,300. Gain or Loss on sale of equipment based on Units of Production Method: #2. Use the Balance Sheet and Income Statement that has been provided for Mattel Corporation to answer the following questions, Be sure to show all calculations otherwise you will receive no credit for the answer. a.) Calculate Mattel's Current Ratio for 2011 AND 2010. b.) As measured by the Current Ratio, in which year was Mattel's liquidity better? Circle one: 2011 or 2010 c.) Calculate Mattel's Debt to Asset for 2011 AND 2010. d.) As measured by the Debt to Asset Ratio, in which year was Mattel's solvency better? Circle one: 2011 or 2010 e.) Calculate Mattel's Return on Equity Ratio for only 2011. L) If Mattel's Return on Equity in 2010 was 30% in which year was it's profitability better as measured by this ratio? Circle one: 2011 or 2010 MATTEL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET 2011 December 1 December 31 thens, cut share data) 2010 $ 1,369,113 1.246,687 487,000 340,907 3.43,707 522.941 822,139 881.851 $ 5,671,638 $ 1,281,123 1.146.106 463.838 335,543 3226,610 484.705 824,007 2411 $ 5,417,733 ASSETS Current Assets Cash and equivalents Accounts receivable, less allowance of $26.3 million and 21.8 million in 2011 and 2010, respectively Inventories Prepaid expenses and other current assets Total current assets Property, plant, and equipment, bet Goodwill Other no current assets Total Assets LIABILITIES AND STOCKHOLDERS' FOUITY Current Liabilities Short-term borrowings Current portion of long-term debt Accounts payable Accrued liabilities Income taxes payable Total current liabilities Noncurrent liabilities Long-term debt Other noncurrent liabilities Total concurrent liabilities Commitments and Contingencies (See Note 13) Stockholders' Equity Common stock $1.00 par value, 10 billion shares authorized: 4414 million shares issued Additional paid in capital Treasury stock at Cost: 104.4 million shares and 92.3 million shares in 2011 and 2010, respectively Retained earnings Accumulated other comprehensive lost Total stockholders' equity Total Liabilities and Stockholders' Equity 8018 50,000 334,999 618,801 27.110 1.038 929 250.000 406. 270 662211 51,801 1,350,282 1,500,000 522,107 2,022, 107 950.000 488, 867 1.438,867 441,369 1.690.405 (2,242,522) 3,167,996 (416665) 2,610,603 $ 5,671,638 441.369 1.706,461 (1.880,692) 2.720,645 359.199) 2,608,584 S 5,417,733 MATTEL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF OPERATIONS Net Sales Cost of sales Gross Profit Advertising and promotion expenses Other selling and administrative expernes Operating Income Interest expense Interest (income) Other non-operating expense (income), net Income Before Income Taxes Provision for income taxes Net Incom $ 6,266,037 3,120.211 3,145,826 699,247 1,405,478 1,041,101 75,332 (8,095) 3,189 970,673 202,165 $ 768,508 S 5,856,195 2,901.22 2,954973 617270 1,405,801 901.902 64339 8,031) (1,328) 546,825 161,962 $ 684,863 S 5,430,846 2,716,149 2,714,691 509,753 1,373,776 731,168 71,843 2003) 7.361 660,047 131,303 $ 528,704
