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The following is the balance sheet for Crown-well Inc. for the period ending December 2011:

Crown-well Inc.

Balance Sheet (2011)

Cash $ 24,000 Current Liabilities $ 30,000

Other current assets 51,000 Long-Term Notes payable 33,000

Total current assets 75,000 Bonds 40,000

Investments 40,000 Common Stock 150,000

Fixed Assets (Net) 125,000 Retained Earnings 49,000

Land 62,000

$ 302,000 $ 302,000

The following transactions occurred during 2012:

$20,000, sale on some of its investments

$12,000, additional land for expansion

$10,000, bonds payment

$20,000, issuance of common stock

$5,000, dividend payment to stockholders

$42,000, Net Income for 2012

$18,000, depreciation

$10,050, taxes

$10,000, Interest expense

$18,000, purchase of second piece of land, using $12,000 in bonds and $6,000 in long-term notes payable.

Required:

a) Prepare a balance Sheet for Crown-well Inc. as at period ending 2012.

b) Compute the firm’s free cash flows for 2012. (Hint: In computing FCF, please consider changes in investments and changes in Land as separate items from the Net Fixed Asset in the balance sheet)

PLEASE SHOW ALL WORKINGS

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Nelly Stracke
Nelly StrackeLv2
28 Sep 2019

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Related questions

The following income statement and balance sheet for Virtual Gaming Systems are provided. Earnings per share for the year ended December 31, 2012, are $1.00. The closing stock price on December 31, 2012, is $28.00.

VIRTUAL GAMING SYSTEMS
Income Statement
For the year ended December 31, 2012
Sales revenue $3,051,000
Cost of goods sold 1,969,000

Gross profit 1,082,000
Expenses:
Operating expenses 869,000
Depreciation expense 42,000
Loss on sale of land 9,000
Interest expense 16,900
Income tax expense 49,400


Total expenses 986,300

Net income $ 95,700

VIRTUAL GAMING SYSTEMS
Balance Sheet
December 31
2012 2011
Assets
Current assets:
Cash $ 190,000 $ 157,000
Accounts receivable 97,000 74,000
Inventory 106,000 146,000
Prepaid rent 12,000 8,000
Long-term assets:
Investment in bonds 129,000 0
Land 220,000 250,000
Equipment 239,000 181,000
Less: Accumulated depreciation (71,000) (29,000)

Total assets $ 922,000 $ 787,000

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 67,000 $ 81,000
Interest payable 6,000 23,000
Income tax payable 19,000 29,000
Long-term liabilities:
Notes payable 292,000 237,000
Stockholders' equity:
Common stock 303,000 281,000
Retained earnings 235,000 136,000

Total liabilities and stockholders’ equity $ 922,000 $ 787,000

Required:

Calculate the following profitability ratios for 2012. (Round your answers to 1 decimal place. Omit the "%" sign in your response.)

Profitability Ratios
1. Gross profit ratio %
2. Return on assets %
3. Profit margin %
4. Asset turnover times
5. Return on equity %
6. Price-earnings ratio times

The following income statement and balance sheet for Virtual Gaming Systems are provided.

VIRTUAL GAMING SYSTEMS
Income Statement
For the year ended December 31, 2012
Sales revenue $3,039,000
Cost of goods sold 1,951,000

Gross profit 1,088,000
Expenses:
Operating expenses 868,000
Depreciation expense 42,000
Loss on sale of land 9,400
Interest expense 16,200
Income tax expense 48,600


Total expenses 984,200

Net income $ 103,800

VIRTUAL GAMING SYSTEMS
Balance Sheet
December 31
2012 2011
Assets
Current assets:
Cash $ 217,000 $ 152,000
Accounts receivable 117,000 70,000
Inventory 116,000 138,000
Prepaid rent 28,000 26,000
Long-term assets:
Investment in bonds 130,000 0
Land 219,000 241,000
Equipment 165,000 169,000
Less: Accumulated depreciation (72,000) (30,000)

Total assets $ 920,000 $ 766,000

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 76,000 $ 93,000
Interest payable 6,000 8,000
Income tax payable 19,000 27,000
Long-term liabilities:
Notes payable 286,000 233,000
Stockholders' equity:
Common stock 298,000 263,000
Retained earnings 235,000 142,000

Total liabilities and stockholders’ equity $ 920,000 $ 766,000

Required:

Assuming that all sales were on account, calculate the following risk ratios for 2012. (Round your intermediate and final answers to 1 decimal place. Omit the "%" sign in your response)

Risk Ratios
1. Receivables turnover ratio times
2. Average collection period days
3. Inventory turnover ratio times
4. Average days in inventory days
5. Current ratio to 1
6. Acid-test ratio to 1
7. Debt to equity ratio %
8. Times interest earned ratio times

Use the following balance sheet and income statement tocalculate the firm's return on equity (net income / commonequity):

Balance Sheet

Income Statement

Assets:

Cash

$3,000

Sales (all credit)

$85,000

Accounts Receivable

5,000

Cost of Goods Sold

(51,000)

Inventories

6,500

Land

20,000

Operating Expenses

(15,000)

Other Fixed Assets

18,000

Depreciation

(1,000)

Liabilities & Owners' Equity

Interest Expense

(3,000)

Accounts Payable

4,000

Long Term Debt

26,700

Taxes

(5,100)

Common Stock

5,000

Paid in Capital

12,000

Retained Earnings

4,800
50.4%
45.4%
41.6%
58.9%
58.2%

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