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coraldeer142Lv1
28 Sep 2019
The balance sheet for Plasma Screens Corporation along with additional information, are provided below:
PLASMA SCREENS CORPORATION
Balance Sheets
December 31, 2018 and 2017 2018 2017 Assets: Current assets: Cash $ 82,000 $ 120,000 Accounts receivable 72,000 96,000 Inventory 65,000 80,000 Prepaid rent 5,000 4,000 Long-term assets: Land 500,000 500,000 Equipment 800,000 600,000 Accumulated depreciation (380,000) (300,000) Total assets $ 1,144,000 $ 1,100,000 Liabilities and Stockholders' Equity: Current liabilities: Accounts payable $ 78,000 $ 82,000 Interest payable 5,000 9,000 Income tax payable 9,000 7,000 Long-term liabilities: Notes payable 75,000 150,000 Stockholders' equity: Common stock 600,000 600,000 Retained earnings 377,000 252,000 Total liabilities and stockholders' equity $ 1,144,000 $ 1,100,000
Additional Information for 2018:
1. Net income is $160,000.
2. The company purchases $200,000 in equipment.
3. Depreciation expense is $80,000.
4. The company repays $75,000 in notes payable.
5. The company declares and pays a cash dividend of $35,000.
Prepare the statement of cash flows using the indirect method.
PLASMA SCREENS CORPORATION Statement of Cash Flows For the Year Ended December 31, 2018 Cash Flows from Operating Activities Net income Adjustments to reconcile net income to net cash flows from operating activities: Net cash flows from operating activities Cash Flows from Investing Activities Net cash flows from investing activities Cash Flows from Financing Activities Net cash flows from financing activities Cash at the beginning of the period Cash at the end of the period
The balance sheet for Plasma Screens Corporation along with additional information, are provided below:
| PLASMA SCREENS CORPORATION Balance Sheets December 31, 2018 and 2017 | ||||
| 2018 | 2017 | |||
| Assets: | ||||
| Current assets: | ||||
| Cash | $ | 82,000 | $ | 120,000 |
| Accounts receivable | 72,000 | 96,000 | ||
| Inventory | 65,000 | 80,000 | ||
| Prepaid rent | 5,000 | 4,000 | ||
| Long-term assets: | ||||
| Land | 500,000 | 500,000 | ||
| Equipment | 800,000 | 600,000 | ||
| Accumulated depreciation | (380,000) | (300,000) | ||
| Total assets | $ | 1,144,000 | $ | 1,100,000 |
| Liabilities and Stockholders' Equity: | ||||
| Current liabilities: | ||||
| Accounts payable | $ | 78,000 | $ | 82,000 |
| Interest payable | 5,000 | 9,000 | ||
| Income tax payable | 9,000 | 7,000 | ||
| Long-term liabilities: | ||||
| Notes payable | 75,000 | 150,000 | ||
| Stockholders' equity: | ||||
| Common stock | 600,000 | 600,000 | ||
| Retained earnings | 377,000 | 252,000 | ||
| Total liabilities and stockholders' equity | $ | 1,144,000 | $ | 1,100,000 |
Additional Information for 2018:
1. Net income is $160,000.
2. The company purchases $200,000 in equipment.
3. Depreciation expense is $80,000.
4. The company repays $75,000 in notes payable.
5. The company declares and pays a cash dividend of $35,000.
Prepare the statement of cash flows using the indirect method.
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Reid WolffLv2
28 Sep 2019
Related questions
The balance sheet for Plasma Screens Corporation, along with additional information, are provided below:
| PLASMA SCREENS CORPORATION Balance Sheets December 31, 2018 and 2017 | ||||
| 2018 | 2017 | |||
| Assets: | ||||
| Current assets: | ||||
| Cash | $ | 142,950 | $ | 154,000 |
| Accounts receivable | 76,800 | 90,500 | ||
| Inventory | 92,000 | 77,300 | ||
| Prepaid rent | 3,400 | 1,700 | ||
| Long-term assets: | ||||
| Land | 465,000 | 465,000 | ||
| Equipment | 762,000 | 655,000 | ||
| Accumulated depreciation | (421,000) | (262,000) | ||
| Total assets | $ | 1,121,150 | $ | 1,181,500 |
| Liabilities and Stockholders' Equity: | ||||
| Current liabilities: | ||||
| Accounts payable | $ | 96,000 | $ | 82,300 |
| Interest payable | 6,750 | 13,500 | ||
| Income tax payable | 7,400 | 4,700 | ||
| Long-term liabilities: | ||||
| Notes payable | 112,500 | 225,000 | ||
| Stockholders' equity: | ||||
| Common stock | 685,000 | 685,000 | ||
| Retained earnings | 213,500 | 171,000 | ||
| Total liabilities and stockholders' equity | $ | 1,121,150 | $ | 1,181,500 |
Additional Information for 2018:
1. Net income is $66,000.
2. The company purchases $107,000 in equipment.
3. Depreciation expense is $159,000.
4. The company repays $112,500 in notes payable.
5 .The company declares and pays a cash dividend of $23,500.
Required:
Prepare the statement of cash flows using the indirect method.
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| Financial Information for Case9-1 | |||
| Industy Wide | |||
| Balance Sheets | |||
| Years Ended December 31, 2014and 2015 | |||
| 2015 | 2014 | ||
| Assets | |||
| Current Assets: | |||
| Cash | $ 30,000 | $ 25,000 | |
| Accounts receivable | 110,000 | 90,000 | |
| Inventories | 100,000 | 80,000 | |
| Total Current Assets | 240,000 | 195,000 | |
| Fixed Assets; | |||
| Plant and equipment | 250,000 | 220,000 | |
| Less accumulated depreciation | (100,000) | (65,000) | |
| Land | 50,000 | 50,000 | |
| Total Fixed Assets | 200,000 | 205,000 | |
| Total Assets | $ 440,000 | $ 400,000 | |
| Liabilities and Equity | |||
| Current Liabilities: | |||
| Accounts payable | $ 58,000 | $ 50,000 | |
| Notes payable-due within one year | 50,000 | 50,000 | |
| Accrued liabilities | - | - | |
| Total Current Liabilities | 108,000 | 100,000 | |
| Long Term Liabilities | 32,000 | 20,000 | |
| Total Liabilities | 140,000 | 120,000 | |
| Stockholders' Equity: | |||
| Common stock | 100,000 | 100,000 | |
| Retained earnings | 200,000 | 180,000 | |
| Total Stockholders' Equity | 300,000 | 280,000 | |
| Total Liabilities and Equty | $ 440,000 | $ 400,000 | |
| Industry Wide | |||
| Income Statement | |||
| Years Ended December 31, 2014and 2015 | |||
| Revenues | $ 1,100,000 | $ 1,000,000 | |
| Cost of goods sold | (700,000) | (650,000) | |
| Gross margin | 400,000 | 350,000 | |
| Operating expenses | (275,000) | (255,000) | |
| Operating income | 125,000 | 95,000 | |
| Interest expense | (15,000) | (15,000) | |
| Income before taxes | 110,000 | 80,000 | |
| Income taxes | (44,000) | (32,000) | |
| Net income | $ 66,000 | $ 48,000 | |
| Financial Information for Case9-1 | |||
| Industy Wide | |||
| Balance Sheets | |||
| Years Ended December 31, 2014and 2015 | |||
| 2015 | 2014 | ||
| Assets | |||
| Current Assets: | |||
| Cash | $ 30,000 | $ 25,000 | |
| Accounts receivable | 110,000 | 90,000 | |
| Inventories | 100,000 | 80,000 | |
| Total Current Assets | 240,000 | 195,000 | |
| Fixed Assets; | |||
| Plant and equipment | 250,000 | 220,000 | |
| Less accumulated depreciation | (100,000) | (65,000) | |
| Land | 50,000 | 50,000 | |
| Total Fixed Assets | 200,000 | 205,000 | |
| Total Assets | $ 440,000 | $ 400,000 | |
| Liabilities and Equity | |||
| Current Liabilities: | |||
| Accounts payable | $ 58,000 | $ 50,000 | |
| Notes payable-due within one year | 50,000 | 50,000 | |
| Accrued liabilities | - | - | |
| Total Current Liabilities | 108,000 | 100,000 | |
| Long Term Liabilities | 32,000 | 20,000 | |
| Total Liabilities | 140,000 | 120,000 | |
| Stockholders' Equity: | |||
| Common stock | 100,000 | 100,000 | |
| Retained earnings | 200,000 | 180,000 | |
| Total Stockholders' Equity | 300,000 | 280,000 | |
| Total Liabilities and Equty | $ 440,000 | $ 400,000 | |
| Industry Wide | |||
| Income Statement | |||
| Years Ended December 31, 2014and 2015 | |||
| Revenues | $ 1,100,000 | $ 1,000,000 | |
| Cost of goods sold | (700,000) | (650,000) | |
| Gross margin | 400,000 | 350,000 | |
| Operating expenses | (275,000) | (255,000) | |
| Operating income | 125,000 | 95,000 | |
| Interest expense | (15,000) | (15,000) | |
| Income before taxes | 110,000 | 80,000 | |
| Income taxes | (44,000) | (32,000) | |
| Net income | $ 66,000 | $ 48,000 | |
1. Calculate the current ratio and average collection period foraccounts receivable, inventory turnover, gross margin percentage,and return on equity for 2014 and 2015 for the JordanCorporation.
2. Calculate the current ratio and average collection period foraccounts receivable, inventory turnover, gross margin percentage,and return on equity for the Industry.
3. Compare the performance of the Jordan Corporation between2014 and 2015 and comment on the trend of each ratio.
4. Compare the performance of the Jordan Corporation in 2015 tothe industry averages and comment on each.
Measures of liquidity, solvency, and profitability
The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $82.60 on December 31, 20Y2.
| Marshall Inc. | ||
| Comparative Retained Earnings Statement | ||
| For the Years Ended December 31, 20Y2 and 20Y1 | ||
| Ā | 20Y2 | 20Y1 |
| Retained earnings, January 1 | $3,704,000 | $3,264,000 |
| Net income | $ 600,000 | $ 550,000 |
| Dividends: | Ā | Ā |
| On preferred stock | (10,000) | (10,000) |
| On common stock | (100,000) | (100,000) |
| Increase in retained earnings | $ 490,000 | $ 440,000 |
| Retained earnings, December 31 | $4,194,000 | $3,704,000 |
Ā Ā
| Marshall Inc. | ||
| Comparative Income Statement | ||
| For the Years Ended December 31, 20Y2 and 20Y1 | ||
| Ā | 20Y2 | 20Y1 |
| Sales | $ 10,850,000 | $10,000,000 |
| Cost of goods sold | (6,000,000) | (5,450,000) |
| Gross profit | $ 4,850,000 | $ 4,550,000 |
| Selling expenses | $ (2,170,000) | $ (2,000,000) |
| Administrative expenses | (1,627,500) | (1,500,000) |
| Total operating expenses | $(3,797,500) | $ (3,500,000) |
| Operating income | $ 1,052,500 | $ 1,050,000 |
| Other revenue and expense: | Ā | Ā |
| Other revenue | 99,500 | 20,000 |
| Other expense (interest) | (132,000) | (120,000) |
| Income before income tax expense | $ 1,020,000 | $ 950,000 |
| Income tax expense | (420,000) | (400,000) |
| Net income | $ 600,000 | $ 550,000 |
Ā Ā
Ā Ā
| Marshall Inc. | ||
| Comparative Balance Sheet | ||
| December 31, 20Y2 and 20Y1 | ||
| Ā | 20Y2 | 20Y1 |
| Assets | Ā | |
| Current assets: | Ā | Ā |
| Cash | $1,050,000 | $ 950,000 |
| Marketable securities | 301,000 | 420,000 |
| Accounts receivable (net) | 585,000 | 500,000 |
| Inventories | 420,000 | 380,000 |
| Prepaid expenses | 108,000 | 20,000 |
| Total current assets | $ 2,464,000 | $2,270,000 |
| Long-term investments | 800,000 | 800,000 |
| Property, plant, and equipment (net) | 5,760,000 | 5,184,000 |
| Total assets | $ 9,024,000 | $8,254,000 |
| Liabilities | Ā | |
| Current liabilities | $ 880,000 | $ 800,000 |
| Long-term liabilities: | Ā | Ā |
| Mortgage note payable, 6% | $ 200,000 | $ 0 |
| Bonds payable, 4% | 3,000,000 | 3,000,000 |
| Total long-term liabilities | $ 3,200,000 | $3,000,000 |
| Total liabilities | $ 4,080,000 | $3,800,000 |
| Stockholdersā Equity | Ā | |
| Preferred 4% stock, $5 par | $ 250,000 | $ 250,000 |
| Common stock, $5 par | 500,000 | 500,000 |
| Retained earnings | 4,194,000 | 3,704,000 |
| Total stockholdersā equity | $ 4,944,000 | $4,454,000 |
| TotalĀ liabilities andĀ stockholdersā equity | $ 9,024,000 | $8,254,000 |
Determine the following measures for 20Y2. Round to one decimal place, including percentages, except for per-share amounts, which should be rounded to the nearest cent.
| 1. Working Capital | $ | Ā |
| 2. Current ratio | Ā | |
| 3. Quick ratio | Ā | |
| 4. Accounts receivable turnover | Ā | |
| 5. Number of daysā sales in receivables | Ā | |
| 6. Inventory turnover | Ā | |
| 7. Number of daysā sales in inventory | Ā | |
| 8. Ratio of fixed assets to long-term liabilities | Ā | |
| 9. Ratio of liabilities to stockholdersā equity | Ā | |
| 10. Times interest earned | Ā | |
| 11. Asset turnover | Ā | |
| 12. Return on total assets | % | |
| 13. Return on stockholdersā equity | % | |
| 14. Return on common stockholdersā equity | % | |
| 15. Earnings per share on common stock | $ | Ā |
| 16. Price-earnings ratio | Ā | |
| 17. Dividends per share of common stock | $ | Ā |
| 18. Dividend yield |
