Question
1.Required information [The following information applies to the questions displayed below.] Golden Corp.'s current year income statement, comparative balance sheets, and additional information follow. For
1.Required information
[The following information applies to the questions displayed below.] Golden Corp.'s current year income statement, comparative balance sheets, and additional information follow. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, (5) Other Expenses are all cash expenses, and (6) any change in Income Taxes Payable reflects the accrual and cash payment of taxes.
GOLDEN CORPORATION Comparative Balance Sheets December 31 | |||||||||||
Current Year | Prior Year | ||||||||||
Assets | |||||||||||
Cash | $ | 169,000 | $ | 112,500 | |||||||
Accounts receivable | 90,500 | 76,000 | |||||||||
Inventory | 608,500 | 531,000 | |||||||||
Total current assets | 868,000 | 719,500 | |||||||||
Equipment | 348,400 | 304,000 | |||||||||
Accum. depreciationEquipment | (160,500 | ) | (106,500 | ) | |||||||
Total assets | $ | 1,055,900 | $ | 917,000 | |||||||
Liabilities and Equity | |||||||||||
Accounts payable | $ | 97,000 | $ | 76,000 | |||||||
Income taxes payable | 33,000 | 27,600 | |||||||||
Total current liabilities | 130,000 | 103,600 | |||||||||
Equity | |||||||||||
Common stock, $2 par value | 598,000 | 573,000 | |||||||||
Paid-in capital in excess of par value, common stock | 205,000 | 167,500 | |||||||||
Retained earnings | 122,900 | 72,900 | |||||||||
Total liabilities and equity | $ | 1,055,900 | $ | 917,000 | |||||||
GOLDEN CORPORATION Income Statement For Current Year Ended December 31 | ||||||
Sales | $ | 1,817,000 | ||||
Cost of goods sold | 1,091,000 | |||||
Gross profit | 726,000 | |||||
Operating expenses | ||||||
Depreciation expense | $ | 54,000 | ||||
Other expenses | 499,000 | 553,000 | ||||
Income before taxes | 173,000 | |||||
Income taxes expense | 29,000 | |||||
Net income | $ | 144,000 | ||||
Additional Information on Current Year Transactions
- Purchased equipment for $44,400 cash.
- Issued 12,500 shares of common stock for $5 cash per share.
- Declared and paid $94,000 in cash dividends.
Required: Prepare a complete statement of cash flows using the indirect method for the current year. (Amounts to be deducted should be indicated with a minus sign.)
2.
Selected current year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31 of the prior year were inventory, $53,900; total assets, $249,400; common stock, $86,000; and retained earnings, $42,976.)
CABOT CORPORATION Income Statement For Current Year Ended December 31 | |||
Sales | $ | 449,600 | |
Cost of goods sold | 297,550 | ||
Gross profit | 152,050 | ||
Operating expenses | 99,400 | ||
Interest expense | 4,800 | ||
Income before taxes | 47,850 | ||
Income tax expense | 19,276 | ||
Net income | $ | 28,574 | |
CABOT CORPORATION Balance Sheet December 31 | |||||||
Assets | Liabilities and Equity | ||||||
Cash | $ | 20,000 | Accounts payable | $ | 15,500 | ||
Short-term investments | 9,600 | Accrued wages payable | 5,000 | ||||
Accounts receivable, net | 33,000 | Income taxes payable | 4,700 | ||||
Merchandise inventory | 36,150 | Long-term note payable, secured by mortgage on plant assets | 67,400 | ||||
Prepaid expenses | 3,100 | Common stock | 86,000 | ||||
Plant assets, net | 148,300 | Retained earnings | 71,550 | ||||
Total assets | $ | 250,150 | Total liabilities and equity | $ | 250,150 | ||
Required: Compute the following: (1) current ratio, (2) acid-test ratio, (3) days' sales uncollected, (4) inventory turnover, (5) days' sales in inventory, (6) debt-to-equity ratio, (7) times interest earned, (8) profit margin ratio, (9) total asset turnover, (10) return on total assets, and (11) return on common stockholders' equity. (Do not round intermediate calculations.)
3.
Franklin Co. reported the following year-end data:
Net income | $ | 229,000 | |
Annual cash dividends of per share | $ | 3 | |
Market price per (common) share | $ | 150 | |
Earnings per share | $ | 15 | |
Compute the (a) price-earnings ratio and (b) dividend yield.
- Price Earnings Ratio
- Dividend Yield
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