Please assist with problems 14-4a and 14-6a

Problem 144A Financial information for Ernie Bishop Company is presented below. ERNIE BISHOP COMPANY Balance Sheets December 31 Assets 2013 2012 Cash $ 77,000 $ 71,500 57,200 44,000 Shortterm investments Receivables (net) 107,800 88,000 Inventory 137,500 148,500 31,900 25,300 Prepaid expenses Land 143,000 143,000 Building and equipment (net) 184,800 192,500 $739,200 $712,800 $110,000 110,000 Liabilities and Stockholders' Equity Notes payable Accounts payable 52,800 46,200 Accrued liabilities 48,400 44,000 Bonds payable, due 2016 165,000 165,000 Common stock, $10 par 220,000 220,000 Retained earnings 143,000 127,600 $739,200 $712,800 ERNIE BISHOP COMPANY Income Statement For the Years Ended December 31 2013 Net sales 2012 $943,800 $877,800 Cost of goods sold 672,100 632,500 Gross profit 271,700 245,300 Operating expenses 224,950 199,100 Net income $ 46,750 $ 46,200 Additional information: 1. Inventory at the beginning of 2012 was $129,800. 2. Total assets at the beginning of 2012 were $695,200. 3. No common stock transactions occurred during 2012 or 2013. 4. All sales were on account. 5. Receivables (net) at the beginning of 2012 were $96,800. (a) Indicate, by using ratios, the change in liquidity and profitability of Ernie Bishop Company from 2012 to 2013. (Round Earnings per share to 2 decimal places, e.g. 1.65, and all others to 1 decimal place, e.g. 6.8 or 6.8% .) 2012 LIQUIDITY Current Acidtest Receivables turnover Inventory turnover PROFITABILITY Profit margin Asset turnover Return on assets Earnings per share 2013 Change :1 :1 times times :1 :1 times times % times % % times % $ $ (b) Given below are three independent situations and a ratio that may be affected. For each situation, compute the affected ratio (1) as of December 31, 2013, and (2) as of December 31, 2014, after giving effect to the situation. Net income for 2014 was $55,000. Total assets on December 31, 2014, were $770,000. Situation (1) Ratio 19,800 shares of common stock were sold at par on July 1, 2014. Return on common stockholders' equity (2) All of the notes payable were paid in 2014. The only change in liabilities was that the notes payable were paid. Debt to total assets (3) Market price of common stock was $10 on December 31, 2013, and $13.75 on December 31, 2014. Priceearnings ratio 2013 Return on common stockholders' equity Debt to total assets Priceearnings ratio 2014 % % times Change % % times Problem 14-6A The comparative statements of Beulah Company are presented below. BEULAH COMPANY Income Statement For the Years Ended December 31 2014 Net sales (all on account) 2013 $500,000 $420,000 Cost of goods sold 314,000 255,000 Selling and administrative 121,000 115,000 7,700 6,600 Expenses Interest expense Income tax expense 19,700 13,800 Total expenses 462,400 390,400 Net income $ 37,600 $ 29,600 BEULAH COMPANY Balance Sheets December 31 Assets 2014 2013 Current assets Cash $ 21,700 $ 18,400 Shortterm investments 18,200 14,700 Accounts receivable (net) 85,500 74,500 Inventory 80,400 59,100 205,800 166,700 Total current assets Plant assets (net) 423,000 384,000 $628,800 $550,700 $121,000 $110,000 11,600 10,700 132,600 120,700 Bonds payable 120,000 80,600 Total liabilities 252,600 201,300 155,000 155,000 Total assets Liabilities and Stockholders' Equity Current liabilities Accounts payable Income taxes payable Total current liabilities Longterm liabilities Stockholders' equity Common stock ($5 par) Retained earnings 221,200 194,400 Total stockholders' equity 376,200 349,400 $628,800 $550,700 Total liabilities and stockholders' equity Additional data: The common stock recently sold at $21.00 per share. Compute the following ratios for 2014. (Round Earnings per share and Acidtest ratio to 2 decimal places, e.g. 1.65, and all others to 1 decimal place, e.g. 6.8 or 6.8% .) (a) Current ratio (b) Acidtest ratio (c) Accounts receivable turnover (d) Inventory turnover (e) Profit margin (f) Asset turnover (g) Return on assets (h) Return on common stockholders' equity (i) Earnings per share (j) Priceearnings ratio (k) Payout ratio (l) Debt to total assets (m) Times interest earned Click if you would like to Show Work for this question: :1 :1 times times % times % % $ times % % times Open Show Work Problem 144A Financial information for Ernie Bishop Company is presented below. ERNIE BISHOP COMPANY Balance Sheets December 31 Assets 2013 $ 77,00 Cash 0 Shortterm investments 57,200 Receivables (net) 107,800 Inventory 137,500 Prepaid expenses 31,900 Land 143,000 Building and equipment (net) 184,800 $739,20 0 Liabilities and Stockholders' Equity $110,00 Notes payable 0 Accounts payable 52,800 Accrued liabilities 48,400 Bonds payable, due 2016 165,000 Common stock, $10 par 220,000 Retained earnings 143,000 $739,20 0 110,000 46,200 44,000 165,000 220,000 127,600 $712,80 0 ERNIE BISHOP COMPANY Income Statement For the Years Ended December 31 2013 $943,800 672,100 271,700 224,950 $ 46,750 2012 $877,800 632,500 245,300 199,100 $ 46,200 Net sales Cost of goods sold Gross profit Operating expenses Net income Additional information: 1 . 2 . 3 . 4 . 5 . Inventory at the beginning of 2012 was $129,800. Total assets at the beginning of 2012 were $695,200. No common stock transactions occurred during 2012 or 2013. All sales were on account. Receivables (net) at the beginning of 2012 were $96,800. 2012 $ 71,50 0 44,000 88,000 148,500 25,300 143,000 192,500 $712,80 0 (a) Indicate, by using ratios, the change in liquidity and profitability of Ernie Bishop Company from 2012 to 2013. (Round Earnings per share to 2 decimal places, e.g. 1.65, and all others to 1 decimal place, e.g. 6.8 or 6.8% .) LIQUIDITY Current Acidtest Receivables turnover Inventory turnover PROFITABILIT Y Profit margin Asset turnover Return on assets Earnings per share 2012 2013 Change 2: 1 0. 7:1 ti me 9s 7 tim es 1. 9:1 0. 6:1 10 tim es 6ti me s 4. 9 % 1. 3 tim es 6.3 7 % $ 2.1 25 5. 2 % 1. 2ti me s 6. 24 % $ 2.1 5% 16% 10% 16% 2.7% 8.3% 2.08% 1.19% (b) Given below are three independent situations and a ratio that may be affected. For each situation, compute the affected ratio (1) as of December 31, 2013, and (2) as of December 31, 2014, after giving effect to the situation. Net income for 2014 was $55,000. Total assets on December 31, 2014, were $770,000. ( 1 ) ( 2 ) ( 3 ) Situation 19,800 shares of common stock were sold at par on July 1, 2014. All of the notes payable were paid in 2014. The only change in liabilities was that the notes payable were paid. Market price of common stock was $10 on December 31, 2013, and R $13.75 on December 31, 2014. 2013 Return on common stockholders' equity Debt to total assets Priceearnings ratio 12. 9 % 22 .3 % 5ti me s 2014 26% 21.4% 2times Problem 14-6A The comparative statements of Beulah Company are presented below. BEULAH COMPANY Income Statement For the Years Ended December 31 2014 Net sales (all on account) $500,000 Expenses Cost of goods sold 314,000 Selling and administrative 121,000 Interest expense 7,700 Income tax expense 19,700 Total expenses 462,400 Net income $ 37,600 Assets Current assets Cash Shortterm investments Accounts receivable (net) Inventory Total current assets Plant assets (net) Total assets Liabilities and Stockholders' Equity BEULAH COMPANY Balance Sheets December 31 2013 $420,000 255,000 115,000 6,600 13,800 390,400 $ 29,600 2014 2013 $ 21,70 0 18,200 85,500 80,400 205,800 423,000 $628,80 0 $ 18,40 0 14,700 74,500 59,100 166,700 384,000 $550,70 0 Ch Current liabilities Accounts payable Income taxes payable Total current liabilities Longterm liabilities Bonds payable Total liabilities Stockholders' equity Common stock ($5 par) Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $121,00 0 11,600 132,600 $110,00 0 10,700 120,700 120,000 252,600 80,600 201,300 155,000 221,200 376,200 $628,80 0 155,000 194,400 349,400 $550,70 0 Additional data: The common stock recently sold at $21.00 per share. Compute the following ratios for 2014. (Round Earnings per share and Acid test ratio to 2 decimal places, e.g. 1.65, and all others to 1 decimal place, e.g. 6.8 or 6.8% .) ( a ) ( b ) ( c ) ( d ) ( e ) (f ) ( g ) ( h ) (i ) (j ) Current ratio 1.5: 1 Acidtest ratio 0.3: 1 6 time s 6ti mes Accounts receivable turnover Inventory turnover Profit margin Asset turnover 7.5 % 1.2 5 time s Return on assets 6% Return on common stockholders' equity 10 % Earnings per share Priceearnings ratio $ 1.21 17.4 time s ( k Payout ratio ) (l Debt to total assets ) ( m Times interest earned ) Click if you would like to Show Work for this question: 13 % 19.1 % 8.4t ime s Open Show Work Problem 144A Your answer is partially correct. Try again. Financial information for Ernie Bishop Company is presented below. ERNIE BISHOP COMPANY Balance Sheets December 31 Assets 2013 2012 Cash $ 77,000 $ 71,500 Shortterm investments 57,200 44,000 Receivables (net) 107,800 88,000 Inventory 137,500 148,500 31,900 25,300 Prepaid expenses Land 143,000 143,000 Building and equipment (net) 184,800 192,500 $739,200 $712,800 $110,000 110,000 Liabilities and Stockholders' Equity Notes payable Accounts payable 52,800 46,200 Accrued liabilities 48,400 44,000 Bonds payable, due 2016 165,000 165,000 Common stock, $10 par 220,000 220,000 Retained earnings 143,000 127,600 $739,200 $712,800 ERNIE BISHOP COMPANY Income Statement For the Years Ended December 31 2013 Net sales 2012 $943,800 $877,800 Cost of goods sold 672,100 632,500 Gross profit 271,700 245,300 Operating expenses 224,950 199,100 Net income $ 46,750 $ 46,200 Additional information: 1. Inventory at the beginning of 2012 was $129,800. 2. Total assets at the beginning of 2012 were $695,200. 3. No common stock transactions occurred during 2012 or 2013. 4. All sales were on account. 5. Receivables (net) at the beginning of 2012 were $96,800. (a) Indicate, by using ratios, the change in liquidity and profitability of Ernie Bishop Company from 2012 to 2013. (Round Earnings per share to 2 decimal places, e.g. 1.65, and all others to 1 decimal place, e.g. 6.8 or 6.8% .) 2012 LIQUIDITY Current Acidtest Receivables turnover Inventory turnover PROFITABILITY Profit margin Asset turnover Return on assets Earnings per share 2013 Change :1 :1 times times :1 :1 times times % times % % times % $ $ (b) Given below are three independent situations and a ratio that may be affected. For each situation, compute the affected ratio (1) as of December 31, 2013, and (2) as of December 31, 2014, after giving effect to the situation. Net income for 2014 was $55,000. Total assets on December 31, 2014, were $770,000. Situation (1) Ratio 19,800 shares of common stock were sold at par on July 1, 2014. Return on common stockholders' equity (2) All of the notes payable were paid in 2014. The only change in liabilities was that the notes payable were paid. Debt to total assets (3) Market price of common stock was $10 on December 31, 2013, and $13.75 on December 31, 2014. Priceearnings ratio 2013 2014 Return on common stockholders' equity Debt to total assets Priceearnings ratio % % times Your answer is partially correct. Try again. The comparative statements of Beulah Company are presented below. BEULAH COMPANY Income Statement For the Years Ended December 31 2014 Net sales (all on account) 2013 $500,000 $420,000 Cost of goods sold 314,000 255,000 Selling and administrative 121,000 115,000 7,700 6,600 Expenses Interest expense Change % % times Income tax expense 19,700 13,800 Total expenses 462,400 390,400 Net income $ 37,600 $ 29,600 BEULAH COMPANY Balance Sheets December 31 Assets 2014 2013 $ 21,700 $ 18,400 Shortterm investments 18,200 14,700 Accounts receivable (net) 85,500 74,500 Inventory 80,400 59,100 Current assets Cash Total current assets 205,800 166,700 Plant assets (net) 423,000 384,000 $628,800 $550,700 $121,000 $110,000 Total assets Liabilities and Stockholders' Equity Current liabilities Accounts payable Income taxes payable Total current liabilities 11,600 10,700 132,600 120,700 Longterm liabilities Bonds payable 120,000 80,600 Total liabilities 252,600 201,300 Common stock ($5 par) 155,000 155,000 Retained earnings 221,200 194,400 Total stockholders' equity 376,200 349,400 $628,800 $550,700 Stockholders' equity Total liabilities and stockholders' equity Additional data: The common stock recently sold at $21.00 per share. Compute the following ratios for 2014. (Round Earnings per share and Acidtest ratio to 2 decimal places, e.g. 1.65, and all others to 1 decimal place, e.g. 6.8 or 6.8% .) (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) Current ratio Acidtest ratio Accounts receivable turnover Inventory turnover Profit margin Asset turnover Return on assets Return on common stockholders' equity Earnings per share Priceearnings ratio :1 :1 times times % times % % $ times (k) (l) (m) Payout ratio Debt to total assets Times interest earned % % times (b) Given below are three independent situations and a ratio that may be affected. For each situation, compute the affected ratio (1) as of December 31, 2013, and (2) as of December 31, 2014, after giving effect to the situation. Net income for 2014 was $55,000. Total assets on December 31, 2014, were $770,000. Situation (1) Ratio 19,800 shares of common stock were sold at par on July 1, 2014. Return on common stockholders' equity (2) All of the notes payable were paid in 2014. The only change in liabilities was that the notes payable were paid. Debt to total assets (3) Market price of common stock was $10 on December 31, 2013, and $13.75 on December 31, 2014. Priceearnings ratio 2013 Return on common stockholders' equity Debt to total assets Priceearnings ratio Click if you would like to Show Open Show Work Work for this question: 2014 Change % % % times % times