YOU MUST SHOW WORK ON ALL PROBLEMS TO RECEIVE CREDIT! This includes the formula, the calculation, and the answer. Failure to do so on ALL the problems will result in a reduced grade.....

2-1. On February 22, 2009 (the real Washington's Birthday!) you company boughtoffice furniturefor thirty thousand dollars. What would bethe dollar value of depreciation your company could take in the following years assuming they use MACRS (please pay attention to the years in question):

a. 2008

b. 2010

c. 2011

d. 2016

e. 2017

2-2: On Sept 30th, the Disney Corp had a Retained Earnings balance of $7,933 million. One year later it had jumped to $9,557 million. They sold no stock during the year but did pay $342 million in common dividends. Their dividend per share (DPS) = $.51 Given this information:

a.what must have been their net income for the year(5 points ) andb.how manyshares of stock must be outstanding(only 2 points)

Please take a minute to think about what it is asking and use the financial statements to help you for (a). For (b), think about how you would know this.

2-3The following 10 questions pertain to "Cline Custome Bikes" their income statement and balance sheet. MUST SHOW ALL WORK INCLUDING FORMULAS!!

A.What was their depreciation expense for 2000?

B.What were the current ratios for BOTH 1999 and 2000

C.Was their current ratio for year 2000 better or worse compared to 1999 - a one word answer please!

D.What was their inventory turnover ratio of 2000

E.What was the average collection period ( year 2000) for accounts receivable?

F.What was their marginal tax rate?

G.How many shares of common stock did they issue (sell) in year 2000?

H.What was their earnings per share

I.How much did they pay in preferred stock dividends

J.What was their "TIE" (times interest earned) ratio

2-4

ABC Corp. provides you with the following data: Sales: $500,000; Operating profit: $300,000; Interest expense: $25,000; Net Income: $100,000; Common stock (par): $10,000; Paid-in capital in excesS of par: $220,000; total number of common shares outstanding: 10,000.

a. Given the above (and asuming no flotation costs) what was the price of a share of common stock when it was sold? (6 points)

b. Assuming no preferred stock, what was the EPS? (2 points)

2-5 BONUS QUESTION

Attached (I hope) you will find a portion of the income sratement from Dover Downs (yes, the casino/hotel). Three years are presented 2007-2009. You will notice they have two line items for Revenue ("sales"), use the combined figure if you need it (for example, for 2009, Revenue would be $232,799,000 (note you add three zeros as the statement says at the top "in thousands").

Using the technique of "common-sized analysis" discuss how well or badly Dover Downs controlled two expense items: "Gaming" and "General & administrative".I need to seeyour calculations. Obviously your analysis is based upon the numbers!

\fIncome Statement Cline Custom Bikes Income Statement ($000) For year ended December 31, 2000 Sales revenue Less Cost of goods sold Gross profit Less operating expenses Selling expense G&A Depreciation Total operating expenses Operating profits Less interest expense Net profit before tax Less taxes (30%) Net profit after tax $2,200 $1,420 $ 780 $300 $270 $ 30 $ 600 $ 180 $ 29 $ 151 $ 45 $ 106 Statement of Retained Earnings Retained Earnings balance (Jan 1 2000) Plus: net profit after tax (for 2000) Less cash dividends on common $ 80 106 (76) Retained Earnings balance (Dec 31, 2000) $ 110 Balance Sheet ($000) December 31 Assets 2000 1999 Current assets Cash Marketable Securities Accounts receivable Inventory Total Current Assets Gross Fixed Assets Less accumulated depreciation Net fixed assets $ 30 10 320 460 $ 820 $ 560 $ 180 $ 380 $ 50 20 350 320 $ 740 $ 520 $ 150 $ 370 Total Assets $1,200 $1,110 Liabilities & stockholders' equity Current liabilities Accounts payable Notes payable Accruals Total current liabilities Long-term Debt Total Liabilities $ $ $ $ $ $ 390 110 20 520 320 840 $ $ $ $ $ $ Stockholders' Equity Common stock (500,000 shares, $0.20 par) Paid-in capital in excess of par Retained earnings Total stockholders' equity $ $ $ $ 100 150 110 360 $ 100 $ 150 $ 80 $ 330 Total liabilities & stockholders' equity $1,200 320 90 20 430 350 780 $1,110