Brief Exercise 18-2

Schellhammer Corporation reported the following amounts in 2013, 2014, and 2015.

2013	2014	2015
Current assets	$230,700	$260,691	$283,761
Current liabilities	$161,630	$167,880	$185,570
Total assets	$462,510	$605,540	$586,650

(b) Perform each of the three types of analysis on Schellhammer?s current assets. (Round percentages to 0 decimal places, e.g. 43% and ratios to 2 decimal places, e.g.1.58.)

2013	2014	2015
Horizontal Analysis
Current assets		%		%		%
Vertical Analysis
Current assets		%		%		%
Ratio Analysis
Current ratio

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Brief Exercise 18-3

Using the following data from the comparative balance sheet of Goody Company.

December 31, 2015	December 31, 2014
Accounts receivable	$531,564	$402,700
Inventory	$826,840	$590,600
Total assets	$2,957,388	$2,594,200

Illustrate horizontal analysis. (Round percentages to 0 decimal places, e.g. 12%.)

Increase or (Decrease)
Goody Company Balance Sheet	December 31, 2015	December 31, 2014	Amount	Percentage
Accounts receivable	$531,564	$402,700	$		%
Inventory	$826,840	$590,600	$		%
Total assets	$2,957,388	$2,594,200	$		%

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Brief Exercise 18-8

Vertical analysis (common size) percentages for Kochheim Company?s sales, cost of goods sold, and expenses are shown below.

Vertical Analysis	2015	2014	2013
Sales	100.0	100.0	100.0
Cost of goods sold	52.1	55.8	59.5
Expenses	21.9	21.1	23.8

(a) Calculate net income.

2015	2014	2013
Net income

(b) Did Kochheim?s net income as a percent of sales increase, decrease, or remain unchanged over the 3-year period?

Brief Exercise 18-11 (Part Level Submission)

The following data are taken from the financial statements of Rainsberger Company.

2015	2014
Accounts receivable (net), end of year	$597,700	$512,300
Net sales on account	3,927,700	3,187,700
Terms for all sales are 1/10, n/60.

(a1)

Compute for each year the accounts receivable turnover. At the end of 2013, accounts receivable (net) was $493,800. (Round answers to 1 decimal place, e.g. 1.6.)

2015	2014
Accounts receivable turnover	times	times

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(a2)

The parts of this question must be completed in order. This part will be available when you complete the part above.

Brief Exercise 18-12 (Part Level Submission)

The following data are from the income statements of Haskin Company.

2015	2014
Sales	$6,365,500	$6,134,300
Beginning inventory	924,800	880,200
Purchases	4,359,400	4,629,700
Ending inventory	1,050,500	924,800

(a1)

Compute for each year the inventory turnover. (Round answers to 1 decimal place, e.g. 1.6.)

2015	2014
Inventory turnover	times	times

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(a2) The parts of this question must be completed in order. This part will be available when you complete the part above.

Brief Exercise 18-13

Guo Company has owners? equity of $397,100 and net income of $133,872. It has a payout ratio of 24% and a return on assets of 16%. How much did Guo pay in cash dividends, and what were its average assets? (Round answers to 0 decimal places, e.g. 125.)

Cash dividends	$
Average assets	$

Exercise 18-2

Operating data for Navarro Corporation are presented below.

2015	2014
Net sales	$745,630	$597,030
Cost of goods sold	467,720	391,150
Selling expenses	119,220	67,570
Administrative expenses	62,300	56,720
Income tax expense	35,460	27,600
Net income	60,930	53,990

Prepare a schedule showing a vertical analysis for 2015 and 2014. (Round answers to 1 decimal place, e.g. 48.5%.)

NAVARRO CORPORATION Condensed Income Statements For the Years Ended December 31
2015	2014
Amount	Percent	Amount	Percent
Net sales	$745,630	%	$597,030	%
Cost of goods sold	467,720	%	391,150	%
Gross profit	277,910	%	205,880	%
Selling expenses	119,220	%	67,570	%
Administrative expenses	62,300	%	56,720	%
Total operating expenses	181,520	%	124,290	%
Income before income taxes	96,390	%	81,590	%
Income taxes expense	35,460	%	27,600	%
Net income	$60,930	%	$53,990	%

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Exercise 18-5

Suppose Nordstrom, Inc., which operates department stores in numerous states, has the following selected financial statement data for the year ending January 30, 2014.

NORDSTORM, INC. Balance Sheet (partial)
(in millions)	End-of-Year	Beginning-of-Year
Cash and cash equivalents	$ 994	$ 90
Accounts receivable (net)	2,544	2,428
Inventory	1,123	1,125
Prepaid expenses	110	116
Other current assets	298	263
Total current assets	$5,069	$4,022
Total current liabilities	$2,518	$2,001

For the year, net sales were $10,323 and cost of goods sold was $6,660 (in millions). (a) Compute the four liquidity ratios at the end of the year. (Round answers to 1 decimal place, e.g. 1.6 .)

Current ratio		:1
Acid-test ratio		:1
Accounts receivable turnover		times
Inventory turnover		times

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Breif Exercise 18-2 Particulars Current assets Current liabilities Total assets Particulars Horizontal analysis Current Asset Vertical analysis Current Asset Raito analysis Current Raito 2013 $230,700 $161,630 $462,510 2014 $260,691 $167,880 $605,540 2013 2014 2015 100% 13% 9% 50% 43% 48% 1.43 1.55 1.53 Breif Exercise 18-3 Particulars Accounts receivable Inventory Total assets 31-Dec-15 $531,564 $826,840 $2,957,388 31-Dec-14 $402,700 $590,600 $2,594,200 Particulars Accounts receivable Inventory Total assets 31-Dec-15 $531,564 $826,840 $2,957,388 31-Dec-14 $402,700 $590,600 $2,594,200 2015 $283,761 $185,570 $586,650 Breif Exercise 18-8 Vertical Analysis Sales Cost of goods sold Expenses Net Income % of sales Net income has increased 2015 $100.00 $52.10 $21.90 $26.00 26% 2014 $100.00 $55.80 $21.10 $23.10 23% Breif Exercise 18-11 Particulars Accounts Receivable at year's end Net sales Avg Accounts receivable Net Credit sales Avg receivable turnover 2015 $597,700 $3,927,700 $555,000 $3,376,250 6.1 2014 $512,300 $3,187,700 $503,050 $3,060,221 6.1 Breif Exercise 18-12 Particulars Sales Beginning inventory Purchases Closing Inventory COGS Avg. Inventory Inventory turnover raito 2015 $6,365,500 $924,800 $4,359,400 $1,050,500 $4,233,700 $987,650 4.3 2014 $6,134,300 $880,200 $4,629,700 $924,800 $4,585,100 $902,500 5.1 Breif Exercise 18-13 Particulars Net income Div Payout raito Cash div. Ret. On asset Asset Increase/= or (decrease) Amount % $128,864 32% $236,240 40% $363,188 14% 2013 $100.00 $59.50 $23.80 $16.70 17% Amount $133,872 24% $32,129 16% $836,700 Exercise 18-2 Net sales Cost of goods sold Gross profit Selling expenses Administrative expenses NAVARRO CORPORATION Condensed Income Statements For the Years Ended December 31 2015 Amount $745,630 467,720 277,910 119,220 62,300 2014 Percent 100.0% 62.7% 37.3% 16.0% 8.4% Amount $597,030 391,150 205,880 67,570 56,720 Percent 100.0% 65.5% 34.5% 11.3% 9.5% Total operating expenses Income before income taxes Income taxes expense Net income 181,520 96,390 35,460 $60,930 Exercise 18-5 NORDSTORM, INC. Balance Sheet (partial) (in millions) Cash and cash equivalents Accounts receivable (net) Inventory Prepaid expenses Other current assets Total current assets Total current liabilities Current Raito (in times) Acid test Raito Accounts receivable turnover Inventory turnover End-of-Year Beginning-of-Year $994 2,544 1,123 110 298 $5,069 $2,518 2.0 1.5 1.0 1.5 $90 2,428 1,125 116 263 $4,022 $2,001 24.3% 12.9% 4.8% 8.2% 124,290 81,590 27,600 $53,990 20.8% 13.7% 4.6% 9.0%