Brief Exercise 18-2
Schellhammer Corporation reported the following
amounts in 2013, 2014, and 2015.
2013
2014
2015
Current assets
$200,000
$210,000
$240,000
Current liabilities
$150,000
$168,000
$184,000
Total assets
$500,000
$600,000
$620,000
(b)
Perform each of the three types of analysis on Schellhammerâs current
assets.(Round percentages to 0 decimal places,
e.g. 43% and ratios to 2 decimal places, e.g.1.58.)
2013
2014
2015
Horizontal Analysis
Current assets
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%
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%
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%
Vertical Analysis
Current assets
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%
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%
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%
Ratio Analysis
Current ratio
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Brief Exercise 18-3
Using the following data from the comparative
balance sheet of Goody Company.
December 31, 2015
December 31, 2014
Accounts receivable
$520,000
$400,000
Inventory
$840,000
$600,000
Total assets
$3,000,000
$2,500,000
Illustrate horizontal analysis.(Round
percentages to 0 decimal places, e.g. 12%.)
Increase or (Decrease)
Goody Company
Balance Sheet
December 31, 2015
December 31, 2014
Amount
Percentage
Accounts receivable
$520,000
$400,000
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%
Inventory
$840,000
$600,000
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%
Total assets
$3,000,000
$2,500,000
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%
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Brief Exercise 18-8
Vertical analysis (common size) percentages for
Kochheim Companyâs sales, cost of goods sold, and expenses are shown below.
Vertical Analysis
2015
2014
2013
Sales
100.0
100.0
100.0
Cost of goods sold
60.2
62.4
63.5
Expenses
25.0
25.6
27.5
(a) Calculate net income.
2015
2014
2013
Net income
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(b) Did Kochheimâs net income as a percent of sales increase,
decrease, or remain unchanged over the 3-year period?
Brief Exercise 18-11 (Part
Level Submission)
The
following data are taken from the financial statements of Rainsberger
Company.
2015
2014
Accounts receivable
(net), end of year
$550,000
$520,000
Net sales on account
3,960,000
3,100,000
Terms for all sales are
1/10, n/60.
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(a1)
Compute for each year the accounts receivable turnover. At
the end of 2013, accounts receivable (net) was $480,000.(Round answers to 1 decimal place, e.g. 1.6.)
2015
2014
Accounts receivable
turnover
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.gif” alt=”http://edugen.wiley.com/edugen/art2/common/pixel.gif”>times
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(a2)
Compute for each year the average collection period. At the end of
2013, accounts receivable (net) was $480,000.(Round answers to 1 decimal place, e.g. 1.6.)
2015
2014
Average collection period
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.gif” alt=”http://edugen.wiley.com/edugen/art2/common/pixel.gif”>days
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Brief Exercise 18-12 (Part Level
Submission)
The
following data are from the income statements of Haskin Company.
2015
2014
Sales
$6,420,000
$6,240,000
Beginning inventory
940,000
860,000
Purchases
4,340,000
4,661,000
Ending inventory
1,020,000
940,000
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(a1)
Compute
for each year the inventory turnover.(Round answers to 1 decimal place, e.g. 1.6.)
2015
2014
Inventory turnover
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(a2)
Compute for each year the average days to sell the inventory.(Round
answers to 1 decimal place, e.g. 1.6.)
2015
2014
Days in inventory
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(a1)
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Brief Exercise 18-13
Guo Company has ownersâ equity of $400,000 and
net income of $66,000. It has a payout ratio of 20% and a return on assets
of 15%.
How much did Guo pay in cash dividends, and what were its average assets?(Round answers to 0 decimal places, e.g. 125.)
Cash dividends
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Average assets
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Exercise 18-2
Operating data for Navarro Corporation
are presented below.
2015
2014
Net sales
$750,000
$600,000
Cost of goods sold
465,000
390,000
Selling expenses
105,000
66,000
Administrative expenses
60,000
54,000
Income tax expense
36,000
27,000
Net income
84,000
63,000
Prepare a schedule showing a vertical analysis for 2015 and 2014.(Round answers to 1 decimal place, e.g. 48.5%.)
NAVARRO CORPORATION
Condensed Income Statements
For the Years Ended December 31
2015
2014
Amount
Percent
Amount
Percent
Net sales
$750,000
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$600,000
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Cost of goods sold
465,000
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390,000
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Gross profit
285,000
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210,000
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Selling expenses
105,000
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66,000
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Administrative expenses
60,000
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54,000
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Total operating expenses
165,000
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120,000
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Income before income taxes
120,000
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90,000
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Income taxes expense
36,000
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27,000
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Net income
$84,000
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$63,000
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Exercise 18-5
SupposeNordstrom,
Inc., which operates department stores in
numerous states, has the following selected financial statement data for the
year ending January 30, 2014.
NORDSTORM, INC.
Balance Sheet (partial)
(in
millions)
End-of-Year
Beginning-of-Year
Cash and cash equivalents
$ 795
$ 72
Accounts receivable (net)
2,035
1,942
Inventory
898
900
Prepaid expenses
88
93
Other current assets
238
210
Total current assets
$4,054
$3,217
Total current liabilities
$2,014
$1,601
For the year, net sales were $8,258 and cost of goods sold was $5,328 (in
millions).
(a)
Compute the four liquidity ratios at the end of the year.(Round answers to 1 decimal place, e.g. 1.6 .)
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