ACC 201 -EXAM 4 Softbyte Corporation Comparative Balance Sheets December 31, 2012 and 2011 2012 2011 Assets Cash $174,000 $117,000 Accounts Receivable 93,000 81,000 Merchandise Inventory 609,000 534,000 Equipment 333,000 297,000 Accumulated Depreciation- Equipment (156,000) (102,000) Total Assets $1,053,000 $927,000

Liabilities & Equity Accounts Payable $69,000 $96,000 Income taxes payable 27,000 24,000 Common Stock, $2 par value 582,000 558,000 Paid-in capital in excess of par value, common stock 198,000 162,000 Retained Earnings 177,000 87,000 Total Liabilities & Equity $1,053,000 $927,000

Softbyte Corporation Income Statement For Year Ended December 31, 2012 Sales $1,992,000 Cost of goods sold 1,194,000 Gross profit 798,000 Operating expenses Depreciation expense $54,000 Other expenses 501,000 555,000 Income before taxes 243,000 Income taxes expense 42,000 Net income $201,000

Additional Information on Year 2012 Transactions Purchased equipment for $36,000 cash. Issued 12,000 shares of common stock for $5 cash per share. Declared and paid $111,000 in cash dividends.

Required: Prepare a complete statement of cash flows; report its cash inflows and cash outflows from operating activities according to the indirect method.

Softbyte Corporation Statement of Cash Flows Indirect Method For Year Ended December 31, 2012

Operating Activities Net income Adjustments to reconcile net income to net cash provided by operating activities Depreciation Increase in accounts receivable Increase in inventory Decrease in accounts payable Increase in income tax payable Net cash provided by operating activities

Investing Activities Purchase of Equipment

Financing Activities Issuance of common stock Payment of dividends Net cash used by financing activities Net increase in cash Cash at beginning of period Cash at end of period

(Note: Questions 1-3 pertain to the information on Pages 1-2)

1.What is the net cash provided by operating activities? A. $119,000 B. $122,000 C. $135,000 D. $144,000

2.What is the net cash used by investing activities? A. $(25,000) B. $(28,000) C. $(36,000) D. $(39,000)

3.What is the net cash used by financing activities? A. $(45,000) B. $(51,000) C. $(53,000) D. $(68,000) Wal-Mart Stores Inc. (WMT) Wal-Mart Stores Inc. (WMT) Wal-Mart Stores Inc. (WMT) Use Wal-Marts financial statements to compute the following ratios for the year ended January 31, 2013.

4. Current ratio A. .83 B. .97 C .65 D. .50

5. Acid-test (quick) ratio A. .10 B. .15 C. .20 D. .25

6. Accounts receivable turnover A. 65.10 times B. 69.90 times C. 73.85 times D. 78.93 times

7. Inventory turnover A. 5.45 times B. 6.87 times C. 7.16 times D. 8.34 times

8. Profit margin A. 2.75% B. 3.62% C. 4.18% D. 5.34% Use Wal-Marts financial statements to compute the following ratios for the year ended January 31, 2013.

9. Asset turnover A. 2.37 times B. 1.23 times C. 3.89 times D. 4.52 times

10. Return on assets A. 8.57% B. 6.19% C. 9.75% D. 7.32%

11. Return on common stockholders equity A. 15.79% B. 23.02% C. 18.94% D. 28.54%

12. Earnings per share (EPS) (Assume the Weighted-Average Common Shares Outstanding is 3.14 billion. A. $5.41 B. $4.35 C. $4.78 D. $6.23

13. Price-earnings (P-E) ratio (Assume the Market Price per Share is $74.75 and the Earnings Per Share is $4.25) A. 10.44 times B. 12.83 times C. 14.35 times D. 17.59 times

Use Wal-Marts financial statements to compute the following ratios for the year ended January 31, 2013.

14. Payout ratio A. 31.54% B. 25.64% C. 15.73% D. 20.85%

15. Debt to total assets ratio A. 58.45% B. 72.85% C. 62.16% D. 54.35%

16. Times interest earned A. 6.48 times B. 10.82 times C. 8.54 times D. 12.43 times

TIME VALUE OF MONEY

17. Future Value of $1 John and Mary Rich invested $15,000 in a savings account paying 5.25% interest at the time their son, Mike, was born. The money is to be used by Mike for his college education. On his 18th birthday, Mike withdraws the money from his savings account. How much did Mike withdraw from his account? A. $42,755.32 B. $30,345.27 C. $35,233.89 D $37,678.11

18. Future Value of Annuity of $1 John and Char Lewis daughter, Debra, has just started high school. They decide to start a college fund for her and will invest $3,000 in a saving account at the end of each year she is in high school (4 payments total). The account will earn 6.5% interest compounded annually. How much will be in the college fund at the time Debra graduates from high school? A. $12,345.74 B. $13,221.52 C. $14,864.39 D. $15,211.28

19. Computing a Car Payment Assume you are financing the purchase of a used car with a four-year loan. The loan has a 6% stated annual interest rate, compounded monthly. The price of the car is $8,000. What is the monthly car payment assuming that the payments start one month after the purchase? A. $187.88 B. $195.49 C. $203.40 D. $209.57

20. Present Value of Annuity of $1 You are evaluating financing options for a loan on a house. You decide that the maximum mortgage payment you can afford is $650 per month. The annual interest rate is 8.4%. If you get a mortgage that requires you to make monthly payments over a 30-year period, what is the maximum home loan you can afford? A. $80,455.37 B. $82,349.58 C. $85,320.01 D. $90,346.55

21. Bonus Question! Is a debit on the left or right? A. Left B. Right