You will now utilize the information developed in pages 2 to 12 to answer various analytical questions. 3> based on gross profit as a % of sales to customers, rank the fiscal years 2013, 2012, and 2011 in terms of which year had the highest. Place a 1 in the box of the highest year, a 2 in the box of the second highest year, etc. [ x only one answer ] x 2013. 1> rank the following items in terms of which had the largest % increase from fiscal 2011 to. 2> rank the following items in terms of which had the largest % increase from fiscal 2012 to. Place a 1 in the box of the largest, a 2 in the box of the second largest, etc. In terms of % change, net earnings per share Net earnings attrib to j& j from fiscal 2011 to fiscal 2012.

Related Questions

BradburnCorporation was formed 5 years ago through a public subscription ofcommon stock. Daniel Brown,

who owns

15%

owns 15% of the common stock, was one of theorganizers of Bradburn and is its

current president. The companyhas been successful, but it currently is experiencing a shortage offunds. On

June 10, Daniel Brownapproached the Topeka National Bank, asking for a 24-monthextension on two

$35,000

notes, which are due on June30, 2013, and September 30, 2013. Another note of

$6,000

is due

on March 31, 2014, but heexpects no difficulty in paying this note on its due date. Brownexplained that

Bradburnâs cash flow problemsare due primarily to the companyâs desire to finance a

$300,000

plant

expansion over the next 2fiscal years through internally generated funds.

The commercialloan officer of Topeka National Bank requested financial reportsfor the last 2 fiscal years.

BRADBURN CORPORATION

Statement of FinancialPosition

Accounts receivable (net)

131,800

125,500

Inventories (at cost)

105,000

50,000

Plant & equipment (net ofdepreciation)

Liabilities and Owners'Equity

Common stock (130,000 shares,$10 par)

Total liabilities and owners'equity

$1,852,000

$1,740,500

^aCash dividends were paid at the rate of $1.00 per sharein fiscal year 2012
and $2.00 per share in fiscal year 2013.

SANDBURG CORPORATION

Income Statement

For The Fiscal Year EndedMarch 31

Income before incometaxes

Net income after incometaxes

$366,000

$297,000

Depreciation charges on theplant and equipment of

$100,000

and

$102,500

for the fiscal years endedMarch 31, 2012 and 2013, respectively, are included in cost ofgoods sold.

Instructions:

Fill in the provided matrixand utilize it as the matrix for "VLOOKUP" formulas within thecells below.

Average inventory - 2011

Total Assets = Mar 31, 2009

1,688,500

Total Assets = Mar 31, 2010

1,740,500

Total Assets = Mar 31, 2011

Inventories = EOY 2010

Amount

Inventories = EOY 2011

Amount

Net income after taxes

(a) Compute the followingitems for Bradburn Corporation:

(1) Current ratio for fiscalyears 2012 and 2013.

Note: The formulas in somecell formulas are "live" and need values placed in their sourcecells.

2012 Current ratio =

Currentassets
----------------------- =
Current liabilities

Currentassets
----------------------- =
Current liabilities

(2) Acid-test (quick) ratiofor fiscal years 2012 and 2013.

2012 Quick ratio =

Current assets -Inventories
----------------------- =
Current liabilities

Current assets -Inventories
----------------------- =
Current liabilities

(3) Inventory turnover forfiscal year 2013.

2013 Inventory Turnover =

Cost of goodssold
------------------------------------ =
Average inventory

(4) Return on assets forfiscal years 2012 and 2013. (Assume total assets were

$1,688,500

at March 31, 2011.)

2012 Return on assets =

Net income
----------------------- =
Average total assets

Formula

---------------- =

Formula

2013 Return on assets =

Net income
----------------------- =
Average total assets

Formula

---------------- =

Formula

(5)Percentage change in sales, cost of goods sold, gross margin, andnet income after taxes from fiscal year
2012 to 2013. Omit "000" from thevalues.

Net income after taxes

#VALUE!

Formula

Note: The formulas in somecell formulas are "live" and need values placed in their sourcecells.

(b)Identify and explain what other financial reports and/or financialanalyses might be helpful to the
commercial loan officer of Topeka NationalBank in evaluating Daniel Brownâs request for a timeextension
on Bradburnâs notes.

Otherfinancial reports and financial analyses which might be helpful tothe commercial loan officer of Spokane National Bank include:

Enter text answeras appropriate.

(c)Assume that the percentage changes experienced in fiscal year 2013as compared with fiscal year 2012
for sales and cost of goods sold will berepeated in each of the next 2 years. Is Bradburnâs desire to
finance the plant expansion frominternally generated funds realistic? Discuss.

Entertext answer as appropriate.

Funds available for plant expansion

Assumptions: Complete as appropriate.

Sales increase at a rate of

Cost of goods sold increases at rate of

despite depreciation remaining constant.

Other operating expenses increase at the same rateexperienced from 2012 to 2013;

i.e., at

Depreciation remains constant at

Dividends remain at

per share.

Plant expansion is financed equally over the twoyears(

each year).

Loan extension is granted.

(d)Should Topeka National Bank grant the extension on Bradburnâs notesconsidering Daniel Brownâs statement
about financing the plant expansionthrough internally generated funds? Discuss.

Enter text answer as appropriate.

ochreoyster815

Comparing Three Depreciation Methods

Newbirth Coatings Company purchased waterproofing equipment onJanuary 2, 2011, for $340,000. The equipment was expected to have auseful life of four years, or 8,000 operating hours, and a residualvalue of $28,000. The equipment was used for 3,000 hours during2011, 2,500 hours in 2012, 1,400 hours in 2013, and 1,100 hours in2014.

Required:

1. Determine the amount of depreciation expensefor the years ended December 31, 2011, 2012, 2013, and 2014, by (a)the straight-line method, (b) the units-of-output method, and (c)the double-declining-balance method. Also determine the totaldepreciation expense for the four years by each method.

Note: FOR DECLINING BALANCE ONLY, round the multiplier to fourdecimal places. Then round the answer for each year to the nearestwhole dollar.

DepreciationExpense
Year	Straight-LineMethod	Units-of-OutputMethod	Double-Declining-BalanceMethod
2011	$	$	$
2012	$	$	$
2013	$	$	$
2014	$	$	$
Total	$	$	$

2. What method yields the highest depreciationexpense for 2013?
SelectStraight-line methodUnits-of-outputmethodDouble-declining-balance methodAll three depreciationmethodsItem 16

3. What method yields the most depreciationover the four-year life of the equipment?
SelectStraight-line methodUnits-of-outputmethodDouble-declining-balance methodAll three depreciationmethods

periwinklegiraffe220

Molina Companys reported net incomes for 2013 and the previoustwo years are presented below.

2013 2012 2011

$105,000 $95,000 $70,000

2015s net income was properly determined after giving effect tothe following accounting changes, error corrections, etc. whichtook place during the year. The incomes for 2013 and 2014 do nottake these items into account and are stated at the amountsdetermined in those years. Ignore income taxes.

Instructions

(a)For each of the six accounting changes, errors, or priorperiod adjustment situations described below, prepare the journalentry or entries Molina Company should record during 2015 . If noentry is required, write none.

(b)After recording the situation in part (a) above, prepare theyear-end adjusting entry for December 31, 2015 . If no entry, writenone.

1>Early in 2013, Molina determined that equipment purchasedin January, 2011 at a cost of $645,000, with an estimated life of 5years and salvage value of $45,000 is now estimated to continue inuse until December 31, 2017 and will have a $15,000 salvage value.Molina recorded its 2013 depreciation at the end of 2013 .

2>Molina determined that it had understated its depreciationby $20,000 in 2012 owing to the fact that an adjusting entry didnot get recorded.

3>Molina bought a truck January 1, 2010 for $50,000 with a$5,000 estimated salvage value and a six-year life. The companydebited an expense account and credited cash on the purchase date.The truck is expected to be traded at the end of 2015 . Molina usesstraight-line depreciation for its trucks.

4>During 2013, Molina changed from the straight-line methodof depreciating its cement plant to the double-declining-balancemethod. The following calculations present depreciation on bothbases. (Ignore income taxes.) The 2013 amount appliesdouble-declining balance to the 1/1/13 carrying amount afterstraight-line was used.

2013 2012 2011

Straight-line $100,000 $100,000 $100,000

Double-declining $200,000 $160,000 $200,000

5>Molina, in reviewing its provision for uncollectiblesduring 2013, has determined that 1/2 of 1% is the appropriateamount of bad debt expense to be charged to operations. The companyhad used 1% as its rate in 2012 and 2011 when the expense had been$20,000 and $14,000, respectively. The company would have recorded$50,000 of bad debt expense on December 31, 2013 under the oldrate.

6>During 2013, Molina decided to change from the LIFO methodof valuing inventories to average cost. The net incomes involvedunder each method were as follows:

2013 2012 2011

LIFO $51,000 $59,000 $42,000

Average cost $63,000 $67,000 $48,000

Assume no difference between LIFO and average cost inventoryvalues in years prior to 2011 .

bluegrasshopper331

ACC 221 Chapter Notes -Income Statement

ACC 221 Full Course Notes

Document Summary

Get access

Related Documents

ACC 221 Chapter Notes -Retained Earnings

ACC 221 Chapter : ShindlerEmily-ARP Pg15.pdf

ACC 221 Chapter Notes -Income Statement, Financial Statement

Related Questions