Exercise 14-3 The comparative condensed balance sheets of Conard Corporation are presented below: CONARD CORPORATION Comparative Condensed Balance Sheets December 31 2012 2011 Assets Current assets $74,000 $80,000 Property, plant, and equipment (net) 99,000 90,000 Intangibles 27,000 40,000 Totals assets $200,000 $210,000 Liabilities and stockholder's equity Current liabilities $42,000 $48,000 Long-term liabilities 143,000 150,000 Stockholders' equity 15,000 12,000 Total liabilities and Stockholders' equity $200,000 $210,000 Instructions: (a) Prepare a horizontal analysis of the balance sheet data for Conard Corporation using 2011 as a base. (b) Prepare a vertical analysis of the balance sheet data for Conard Corporation in columnar form for 2012. Exercise 14-5 Nordstrom, Inc. operates department stores in numerous states. Selected financial statement data for the year ending January 31, 2009, are shown below: NORDSTROM, INC. Balance Sheet (partial) (in millions) End-of-Year Beginning-of-Year Cash and cash equivalents $72 $358 Accounts receivable (net) 1,942 1,788 Merchandise inventory 900 956 Prepaid expenses 93 78 Other current assets 210 181 Total current assets $3,217 $3,361 Total current assets $1,601 $1,635 For the year,, net credit sales were $8,272, and cost of goods sold was $5,417 (in millions). Instructions: (a) Compute the four liquidity ratios at the end of the year. (b) Using the data in the chapter, compare Nordstroms liquidity with (1) that of J.C. Penney Company, and (2) the industry averages for department stores. Exercise 14-7 Bennis Company has the following comparative balance sheet data. BENNIS COMPANY Balance Sheet December 31 2012 2011 Cash $15,000 $30,000 Receivables (net) 70,000 60,000 Inventories 60,000 50,000 Plant assets (net) 200,000 180,000 $345,000 $320,000 Accounts payable $50,000 $60,000 Mortagae payable (15%) 100,000 100,000 Common stock, $10 par 140,000 120,000 Retained earnings 55,000 40,000 $345,000 $320.00 Additional information for 2012: 1. Net income was $25,000. 2. Sales on account were $410,000. Sales returns and allowances were $20,000. 3. Cost of goods sold was $198,000. 4. The allowance for doubtful accounts was $2,500 on December 31, 2012, and $2,000 on December 31,2011. Instructions: Compute the following ratios at December 31, 2012. (a) Current. (b) Acid-test. (c) Receivables turnover. (d) Inventory turnover. Exercise 14-9 The income statement for Christensen, Inc., appears below. CHRISTENSEN, INC. Income Statement For the Year Ended December 31, 2011 Sales $400,000 Cost of goods sold 230,000 Gross profit 170,000 Expenses (including $16,000 interest and $24,000 income taxes) 105,000 Net income $65,000 Additional information: 1. The weighted-average common shares outstanding in 2011 were 30,000 shares. 2. The market price of Christensen, Inc. stock was $13 in 2011. 3. Cash dividends of $26,000 were paid, $5,000 of which were to preferred stockholders. Instructions: Compute the following ratios for 2011. (a) Earnings per share. (b) Price-earnings. (c) Payout. (d) Times interest earned