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CHAPTER 2 The Balance Sheet 81 STUDY QUESTIONS AND PROBLEMS 21. What information is provided in a balance 22. How is a common si balance sheet created 21 Discuss how marketable securities are vald on the balance sheet. 24. How can the allowance for doubtful be used to earning quality? Why is the valuation of inventores important in financial sporting 26. Why would a company switch to the LIROmed intory valuation in an inflation ay period? 27. Which inventory valuation method. FIFO OURO, will generally produce an ending inventory value on the balance sheet that is cost current cost? 28 Discuss the difference between the straight line method of depreciation and the scorer ated methods. Why do companies use different depreciation methods for tax reporting and financial reporting? 2.9. What is the purpose of listing the account Commitments and continories on the bal ance sheet even though no dollar amounts appear? 2.10. How is it possible for a company with positive retained earnings to be unable to pay a cash dividend? 2.11. The King Corporation has total annual revenue of $800.000 expenses other than depre ciation of $350,000; depreciation expense of $200,000 for tax purposes and depreciation expense of $130,000 for reporting purposes. The tax rate is 34%. Calculate net income for reporting purposes and for tax purposes. What is the deferred tax liability? 2.12. Explain how treasury stock affects the stockholders' equity section of the balance sheet and the calculation of earnings per share. 2.13. Using the following amounts in thousands) reported in Zebra Technologies consolidated balance sheets and statements of income at December 31, 2013 and 2012, and the valus tion schedule, analyze the accounts receivable and allowance accounts for all years. 2013 2012 $1,038,159 9996,168 Net Sales Accounts receivable, net of allowances for doubtful accounts of $453 in 2013 and 5669 in 2012 $ 176,917 $168,732 Schedule II-Valuation and Qualifying Accounts Years Ended December 31, 2013 and 2012 Balance at Beginning of Period Charged to Costs and Expenses Balance at End of Period Deductions 2013 Allowance for $ 669 5373 $589 $ 453 doubtful accounts 2012 Allowance for $1,560 $ 0 $891 669 doubtful accounts 2011 Allowance for $1,459 $343 5242 $1,560 doubtful accounts Extracted from 10-K fines for Zebra Technologies 2013. Obtained from US Securities and Exchange Commission www.sec.go.

Answer 1

a. Percentage change in Net Sales from 2012 to 2013 = (1,038,159 - 996,168)/996,168 * 100 = 4.21%

b. Percentage change in Account Receivable from 2012 to 2013 = (176917-168732)/168732 * 100 = 4.85%

c. Percentage change in allowance for doubtful accouts = (453-669)/669 * 100 = -32.29%

e. Allowance accout as a percentage of accounts receivable for 2012 = 669/168,732 * 100 = 0.3965%

f. Allowance accout as a percentage of accounts receivable for 2013 = 453/176,917 * 100 = 0.2561%

Parts d and g are not clear in the question about which Multiple Choice question they are referring.