Homework Help for Accounting

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Accounting deals with the process of recording financial transactions pertaining to a business entity. Accounting involves summarizing, analyzing and reporting these transactions to oversight agencies, regulators and tax collection entities.

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OC user
OC user
in Accounting·
19 Sep 2018
EXERCISE 15-2 Financial Ratios for Assessing Liquidity (L015-2] Comparative financial statements for Weller Corporation, a merchandising company, for the fiscal year ending December 31 appear below. The company did not issue any new common stock dur ing the year. A total of 800,000 shares of common stock were outstanding. The interest rate on the bond payable was 12%, the income tax rate was 40%, and the dividend per share of common stock was $0.40. The market value of the company's common stock at the end of the year was $18. All of the company's sales are on account. Weller Corporation Comparative Balance Sheet (dollars in thousands) This Year Last Year Assets Current assets: Cash................... Accounts receivable, net ......... Inventory ..................... Prepaid expenses .............. Total current assets ............... Property and equipment: Land ............ Buildings and equipment, net ........ Total property and equipment. Total assets ........ $ 1,280 12,300 9,700 1,800 25,080 $ 1,560 9,100 8,200 2,100 20,960 6,000 19,200 25,200 $50,280 6,000 19,000 25,000 $45,960 .... $ 9,500 600 300 10,400 $ 8,300 700 300 9,300 Liabilities and Stockholders' Equity Current liabilities: Accounts payable.. Accrued liabilities .......... Notes payable, short term ........ Total current liabilities ......... Long-term liabilities: Bonds payable ............ Total liabilities .............................. Stockholders' equity: Common stock ... Additional paid-in capital ...... Total paid-in capital ............... Retained earnings ........ . Total stockholders' equity .. Total liabilities and stockholders' equity .......... 5,000 15,400 5,000 14,300 800 4,200 800 4,200 5,000 29,880 34,880 $50,280 5,000 26,660 31,660 $45,960 Weller Corporation Comparative Income Statement and Reconciliation (dollars in thousands) This Year Last Year $79,000 52,000 $74,000 48,000 26,000 27,000 8,500 12.000 Sales ..... . Cost of goods sold ........ Gross margin .......................... Selling and administrative expenses: Selling expenses ... Administrative expenses ................ Total selling and administrative expenses.... Net operating income.... Interest expense.......... Net income before taxes ................. Income taxes ........ Net Income .......... Dividends to common stockholders ......... Net income added to retained eamings ...... Beginning retained earnings .............. Ending retained earnings ................. 20,500 6,500 600 5,900 2,360 8,000 11,000 19,000 7,000 600 6,400 2,560 3,840 3,540 320 320 3,220 26,660 $29,880 3,240 23,420 $26,660 Required: Compute the following financial data and ratios for this year. 1. Working capital. 2. Current ratio. 3. Acid-test ratio.
OC user
OC user
in Accounting·
18 Sep 2018

Information on Psi Phi Inc.’s three products are as follows:

A B C

Unit sales per month ……………………………………………………… 1,600 3,000 1,600

Selling price per unit ………………………………………………………. $10.00 $15.00 $8.00

Variable cost per unit……………………………………………………... (10.40) (12.00) (4.00)

Unit contribution margin………………………………………………….. $(0.40) $3.00 $4.00

Required:

Determine the effect of each of the following situations wouldhave on monthly profits. Each situation should be evaluatedindependently of all others.

Product A is discontinued.

Product A is discontinued and the subsequent loss of customerscause sales of Product B to decline by 200 units.

The selling price of Product A is increased to $11.00 with asales decrease of 300 units.

The price of Product B is increased to $16.00 with a resultingsales decrease of 400 units. However, some of the customers shiftto Product A; sales of Product A increase by 280 units.

Product A is discontinued, and the plant in which Product A wasproduced is used to produce Product D, a new product. Product D hasa unit contribution margin of $0.60.Monthly sales of Product D arepredicted to be 1,200 units.

The selling price of Product C is increased to $9.00 and theselling price of Product B is decreased to $14.00.Sales of ProductC decline by 400 units, while sales of Product N increase by 600units.


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