ACCTG 211 Lecture Notes - Lecture 17: Financial Statement, Management Accounting
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IKIBAN INC. | ||||||||
2015 | 2014 | |||||||
Assets | ||||||||
Cash | $ | 96,500 | $ | 56,200 | ||||
Accounts receivable, net | 69,300 | 51,400 | ||||||
Inventory | 66,600 | 96,800 | ||||||
Prepaid expenses | 5,100 | 6,400 | ||||||
Total current assets | 237,500 | 210,800 | ||||||
Equipment | 135,200 | 120,000 | ||||||
Accum. depreciationâEquipment | (28,900 | ) | (10,500 | ) | ||||
Total assets | $ | 343,800 | $ | 320,300 | ||||
Liabilities and Equity | ||||||||
Accounts payable | $ | 26,900 | $ | 32,200 | ||||
Wages payable | 7,100 | 16,700 | ||||||
Income taxes payable | 2,500 | 4,100 | ||||||
Total current liabilities | 36,500 | 53,000 | ||||||
Notes payable (long term) | 42,000 | 70,000 | ||||||
Total liabilities | 78,500 | 123,000 | ||||||
Equity | ||||||||
Common stock, $5 par value | 240,000 | 189,000 | ||||||
Retained earnings | 25,300 | 8,300 | ||||||
Total liabilities and equity | $ | 343,800 | $ | 320,300 | ||||
IKIBAN INC. | ||||||
Sales | $ | 673,000 | ||||
Cost of goods sold | 407,000 | |||||
Gross profit | 266,000 | |||||
Operating expenses | ||||||
Depreciation expense | $ | 53,000 | ||||
Other expenses | 66,900 | |||||
Total operating expenses | 119,900 | |||||
| 146,100 | |||||
Other gains (losses) | ||||||
Gain on sale of equipment | 2,600 | |||||
Income before taxes | 148,700 | |||||
Income taxes expense | 59,480 | |||||
Net income | $ | 89,220 | ||||
a. A $28,000 note payable is retired at its $28,000 carrying (book) value in exchange for cash.
b. The only changes affecting retained earnings are net income and cash dividends paid.
c. New equipment is acquired for $63,800 cash.
d. Received cash for the sale of equipment that had cost $48,600, yielding a $2,600 gain.
e. Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement.
f. All purchases and sales of inventory are on credit.
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(2) Compute the company's cash flow on total assets ratio for its fiscal year 2015.
Krogh Lumber's 2016 financial statements are shown here.
Now suppose 2017 sales increase by 25% over 2016 sales. Assume that Krogh cannot sell any fixed assets. All assets other than fixed assets will grow at the same rate as sales; however, after reviewing industry averages, the firm would like to reduce its operating costs/sales ratio to 82% and increase its total liabilities-to-assets ratio to 42%. The firm will maintain its 60% dividend payout ratio, and it currently has 1 million shares outstanding. The firm plans to raise 35% of its 2017 forecasted interest-bearing debt as notes payable, and it will issue bonds for the remainder. The firm forecasts that its before-tax cost of debt (which includes both short- and long-term debt) is 11.5%. Any stock issuances or repurchases will be made at the firm's current stock price of $40. Develop Krogh's projected financial statements. What are the balances of notes payable, bonds, common stock, and retained earnings? Round your answers to the nearest hundredth of thousand of dollars. Krogh Lumber Pro Forma Balance Statement December 31, 2017 (Thousands of Dollars) | |||||||||||||||||||||||||||||||||||||||||||||||
2016 | 2017 | ||||||||||||||||||||||||||||||||||||||||||||||
Cash | $1,800 | $ | |||||||||||||||||||||||||||||||||||||||||||||
Accounts receivable | 10,800 | $ | |||||||||||||||||||||||||||||||||||||||||||||
Inventories | 12,600 | $ | |||||||||||||||||||||||||||||||||||||||||||||
Fixed assets | 21,600 | $ | |||||||||||||||||||||||||||||||||||||||||||||
Total assets | $46,800 | $ | |||||||||||||||||||||||||||||||||||||||||||||
Payables + accruals | $9,720 | $ | |||||||||||||||||||||||||||||||||||||||||||||
Short-term bank loans | 3,472 | $ | |||||||||||||||||||||||||||||||||||||||||||||
Total current liabilities | $13,192 | $ | |||||||||||||||||||||||||||||||||||||||||||||
Long-term bonds | 5,000 | $ | |||||||||||||||||||||||||||||||||||||||||||||
Total debt | $18,192 | $ | |||||||||||||||||||||||||||||||||||||||||||||
Common stock | 2,000 | $ | |||||||||||||||||||||||||||||||||||||||||||||
Retained earnings | 26,608 | $ | |||||||||||||||||||||||||||||||||||||||||||||
Total common equity | $28,608 | $ | |||||||||||||||||||||||||||||||||||||||||||||
Total liab. and equity | $46,800 | $ |
IKIBAN INC. | ||||||||
2013 | 2012 | |||||||
Assets | ||||||||
Cash | $ | 87,500 | $ | 44,000 | ||||
Accounts receivable, net | 65,000 | 51,000 | ||||||
Inventory | 63,800 | 86,500 | ||||||
Prepaid expenses | 4,400 | 5,400 | ||||||
Equipment | 124,000 | 115,000 | ||||||
Accum. depreciationâEquipment | (27,000 | ) | (9,000 | ) | ||||
Total assets | $ | 317,700 | $ | 292,900 | ||||
Liabilities and Equity | ||||||||
Accounts payable | $ | 25,000 | $ | 30,000 | ||||
Wages payable | 6,000 | 15,000 | ||||||
Income taxes payable | 3,400 | 3,800 | ||||||
Notes payable (long term) | 30,000 | 60,000 | ||||||
Common stock, $5 par value | 220,000 | 160,000 | ||||||
Retained earnings | 33,300 | 24,100 | ||||||
Total liabilities and equity | $ | 317,700 | $ | 292,900 | ||||
IKIBAN INC. Income Statement For Year Ended June 30, 2013 | ||||||
Sales | $ | 678,000 | ||||
Costof goods sold | 411,000 | |||||
Gross profit | 267,000 | |||||
Operating expenses | ||||||
Depreciation expense | $ | 58,600 | ||||
Other expenses | 67,000 | |||||
Total operating expenses | 125,600 | |||||
141,400 | ||||||
Other gains (losses) | ||||||
Gain on sale ofequipment | 2,000 | |||||
Income before taxes | 143,400 | |||||
Income taxes expense | 43,890 | |||||
Netincome | $ | 99,510 | ||||
Additional Information |
a. | A $30,000 notepayable is retired at its $30,000 carrying (book) value in exchangefor cash. |
b. | The only changesaffecting retained earnings are net income and cash dividendspaid. |
c. | New equipment isacquired for $57,600 cash. |
d. | Received cashfor the sale of equipment that had cost $48,600, yielding a $2,000gain. |
e. | Prepaid Expensesand Wages Payable relate to Other Expenses on the incomestatement. |
f. | All purchasesand sales of merchandise inventory are on credit. |
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