Question
TEST III: PROBLEM SOLVING 15 points A. The following data are available for the NEW TRENDING Corporation for years 2019 and 2018 . New Trending
TEST III: PROBLEM SOLVING 15 points
A.
The following data are available for the NEW TRENDING Corporation for years 2019 and 2018.
New Trending Corporation
INCOME STATEMENT
For the year ended December 31, 2018
Net Sales P 1,000,000
Cost of Goods Sold:
Inventory, December 31, 2017 P 250,000
Purchases 720,000
Total Goods available P 970,000
Inventory, December 31, 2018 220,000 750,000
Gross Margin on Sales P 250,000
Selling and administrative (including
Depreciation of P20,000) 115,000
Net Income Before Tax P 135,000
Provision for Income Tax 45,000
Net Income for the Year P 90,000
New Trending Corporation
RETAINED EARNINGS STATEMENT
For the year ended December 31, 2018
Retained Earnings, December 31, 2017 P 130,000
Add: Net Income for the Year 90,000
Total P 220,000
Less: Dividends Paid 30,000
Retained Earnings, December 31, 2018 P 190,000
New Trending Corporation
BALANCE SHEETS
December 31, 2017 and 2018
ASSETS 2017 2018
Current Assets
Cash P 75,000P 85,000
Marketable Securities 25,000 25,000
Trade Receivables, net 185,000 245,000
Inventory, at cost 250,000 220,000
Prepaid Expenses 15,000 10,000
Total Current Assets P 550,000P 585,000
Non-current Assets
Equipment, net P 340,000P 320,000
Other Assets 15,000 15,000
Total Non-current Assets P 355,000P 335,000
TOTAL ASSETS P 905,000P 920,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Trade Payables P 185,000P 165,000
Accrued Expenses 20,000 25,000
Other Current Liabilities 10,000 10,000
Total Current Liabilities P 215,000P 200,000
Non-current Liabilities
Mortgage Payable P 120,000P 120,000
TOTAL LIABILITIES P 335,000P 320,000
Stockholders' equity9
Capital Stock, P100 par P 300,000P 300,000
Additional Paid-in Capital 30,000 30,000
Retained Earnings-Appropriated 80,000 80,000
Retained Earnings -Unappropriated 160,000 190,000
Total Stockholders' Equity P 570,000P 600,000
TOTAL LIABILTIES AND STOCKHOLDERS' EQUITYP 905,000P 920,000
NOTE: Use 360 days in the computation of Receivable and Inventory days, round off your answers to two (2) decimal places.
REQUIREMENTS: COMPUTE FOR THE FOLLOWING RATIOS AND MEASUREMENTS FOR 2018
- Amount of Working Capital
- Current Ratio
- Acid Test (Quick) Ratio
- Cash Flow from Operations to Current Liabilities
- Accounts Receivables Turnover
- Days' Sales in Receivable
- Inventory Turnover
- Inventory Days' Sales
- Gross Profit Ratio
- Earnings Per Share (EPS)
- Book Value Per Share
- Net Profit ratio
- Rate of Return on Equity
- Cash from Operations to Total Liabilities
- Ratio of Total Stockholders' Equity to Total Liabilities
B. (2 points each) 10 points
The following information pertains to Gem Company's manufacturing operations:
Inventories March 1 March 31
Direct materials P 36,000 P 30,000
Work in process 18,000 12,000
Finished goods 54,000 72,000
Additional information for the month of March:
Direct materials purchased P 84,000
Direct labor cost 60,000
Factory overhead 80,000
REQUIRED:
- Compute for the prime cost for March
- Compute for the conversion cost for March
- Compute for the total manufacturing costs for March
- Compute for the cost of goods manufactured for March
- Compute for the cost of goods sold for March
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Intermediate Accounting
Authors: James D. Stice, Earl K. Stice, Fred Skousen
16th Edition
324376375, 0324375743I, 978-0324376371, 9780324375749, 978-0324312140
