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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

  1. Purchased equipment for $44,400 cash.
  2. Issued 12,500 shares of common stock for $5 cash per share.
  3. 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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