Accounting
Question 2 (Total marks= 20) (a) Consider the following financial data (in millions of dollars) for Costello Laboratories over the period of 2014–2018: Year Sales Net income Total assets Common equity 2014 $3,800 $500 $3,900 $1,800 2015 4,400 650 4,400 2,100 2016 5,000 750 4,800 2,500 2017 5,400 860 4,900 2,700 2018 6,200 1,000 5,600 2,800 Using the Du Pont System, describe the changes in the return on equity from year to year. (10 marks) (b) Construct the common size balance sheet for Grisham Company for 2017: Balance Sheet (in millions) Assets Liabilities Cash $50 Current liabilities $30 Accounts receivable $30 Long-term debt $90 Inventory $80 Equity $240 Plant and equipment $200 Total liabilities and equity $360 Total assets $360 (5 marks) (c) Redan Manufacturing uses 2,500 switch assemblies per week and then reorders another 2,500. If the relevant carrying cost per switch assembly is $10, and the fixed order cost is $2,400, is Redan’s inventory policy optimal? Why or why not? (5 marks)
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Redan Manufacturing uses 2,500 switch assemblies per week and then reorders another 2,500. The relevant carrying...
Redan Manufacturing uses 2,500 switch assemblies per week and then reorders another 2,500. The relevant carrying cost per switch assembly per year is $10.00, and the fixed order cost is $ 1,250. Suppose the firm manages its inventory over an one year period. What is the Economic Order Quantity ( EOQ)?
Baresse Corporation: Income Statements for Year Ending December 31 (Millions of Dollars) 2019 2018 Sales $11,000...
Baresse Corporation: Income Statements for Year Ending December 31 (Millions of Dollars) 2019 2018 Sales $11,000 $10,000 Operating costs excluding depreciation 9,360 8,500 Depreciation and amortization 380 360 Earnings before interest and taxes $1,260 $1,140 Less interest 120 100 Pre-tax income $1,140 $1,040 Taxes (40%) $456 $416 Net income available to common shareholders $684 $624 Common dividends $220 $200 Baresse Corporation: Balance Sheets as of December 31 (Millions of Dollars) 2019 2018 Assets Cash $550 $500 Short term investments 110...
Question 2 (Total marks= 20) Adams Corporation manufactures fasteners. The company's income statements for three years...
Question 2 (Total marks= 20) Adams Corporation manufactures fasteners. The company's income statements for three years are indicated in Exhibit 1. The balance Sheets for the same period are shown in Exhibit 2. Exhibit 1 ADAMS CORPORATION Income Statement 2017 Sales (all on credit). $1,500,000 Cost of goods sold. 950,000 Gross profit........ 550,000 Selling and administrative expense. 380,000 Operating profit. 170,000 Interest expense. 30,000 Net income before taxes. 140,000 Taxes.......... 46,120 Net Income. $93,880 Shares.. 40,000 2018 $1,800,000 1,120,000 680,000...
Question 2 Prepare a Statement of Cash Flows for the Year Ending December 31, 201? for...
Question 2 Prepare a Statement of Cash Flows for the Year Ending December 31, 201? for the Jentayu Corporation from the following Income Statement& Balance Sheet. Jentayu Corporation Income Statement For the Year Ended 31 December, 2018(in RM Millions) RM 600 460 140 Sales (-) Cost of goods sold Gross profits (-) Operating expenses: 20 Selling expenses General & administrative expenses Total operating expenses EBITDA Depreciation expense 15 35 105 30 75 15 60 18 Interest expense EBT Taxes Net...
Just Dew It Corporation reports the following balance sheet information for 2017 and 2018 Assets 2017...
Just Dew It Corporation reports the following balance sheet information for 2017 and 2018 Assets 2017 2018 Current assets Cash Accounts receivable Inventory JUST DEW IT CORPORATION 2017 and 2018 Balance Sheets Liabilities and Owners' Equity 2018 2017 Current liabilities $ 14,105 Accounts payable $ 46.382 32,815 Notes payable 18,246 57,204 $ 12.157 29,382 54,632 $ 49.276 19,784 Total $ 96,171 $ 104,124 Total $ 64,628 $ 69,060 Long-term debt $ 49,000 $ 45,000 Owners' equity Common stock and paid-in...
Using Rhodes Corporation’s financial statements (shown after part f), answer the following questions. a. What is...
Using Rhodes Corporation’s financial statements (shown after part f), answer the following questions. a. What is the net operating profit after taxes (NOPAT) for 2018? b. What are the amounts of net operating working capital for both years? c. What are the amounts of total net operating capital for both years? d. What is the free cash flow for 2018? e. What is the ROIC for 2018? f. How much of the FCF did Rhodes use for each of the...
Just Dew It Corporation reports the following balance sheet information for 2017 and 2018. JUST DEW...
Just Dew It Corporation reports the following balance sheet information for 2017 and 2018. JUST DEW IT CORPORATION 2017 and 2018 Balance Sheets Liabilities and Owners' Equity 2018 2017 Current liabilities 17,775 Accounts payable $ 46,875 16,425 Notes payable 19,125 56,925 Assets 2017 Current assets Cash $ 12,000 Accounts receivable 12,750 Inventory 50,250 2018 $ $ 55,575 24,750 Total $ 75,000 $ 91,125 Total $ 66,000 $ 30,000 $ 80,325 $ 27,000 Long-term debt Owners' equity Common stock and paid-in...
Please show all work. 1. Statement of Cash Flows and Standardized Financial Statements a) Net income...
Please show all work. 1. Statement of Cash Flows and Standardized Financial Statements a) Net income for your firm was $10,000 last year. The depreciation expense was $2,500; accounts receivable increased $1,250; accounts payable increased $800; and inventories increased by $2,000. Identify the sources and uses of cash • What was the total cash flow from operations for the period? Operating activities = Net Income + Depreciation + Source (inflow) - Use foutflow) b) i) Prepare the 2018 common-size Income...
Woodlands Inc. 2015 Income Statement ($ in millions) Total operating revenues $3,806 Cost of goods sold...
Woodlands Inc. 2015 Income Statement ($ in millions) Total operating revenues $3,806 Cost of goods sold 2,315 Selling, general, and administrative expenses 546 Depreciation 311 Eamings before interest and taxes (EBIT) Interest expense $634 170 $464 Pretax income Taxes 162 Net income $302 Dividends 75 Woodlands Inc. Balance Sheet ($ in millions) 2015 2014 Liabilities and Stockholders' Equity $ 503 $ 227 Accounts payable 2015 2014 $ 686$ 613 Assets Cash and equivalents Accounts receivable Inventory Net property & equipment...
Use the following tinancial statements: Dynamic Mattress Year-End Balance Sheet for 2014 (figures in $ millions)...
Use the following tinancial statements: Dynamic Mattress Year-End Balance Sheet for 2014 (figures in $ millions) Current Liabilities: Bank loans Current Assets Cash Marketable securities Accounts receivable Inventory 49 134 183 188 Accounts payable 137 142 467 Long-term debt Total current liabilities Total current assets 84 428 Net worth (equity and retained earnings) Fixed assets Gross investment Less depreciation Net fixed assets 332 104 228 695 Total assets Total liabilities and net worth 695 Dynamic Mattress Year-End Balance Sheet for...
Question 2 (Total marks= 20) Adams Corporation manufactures fasteners. The company's income statements for three years are indicated in Exhibit 1. The balance Sheets for the same period are shown in Exhibit 2. Exhibit 1 ADAMS CORPORATION Income Statement 2017 Sales (all on credit). $1,500,000 Cost of goods sold. 950,000 Gross profit........ 550,000 Selling and administrative expense. 380,000 Operating profit. 170,000 Interest expense. 30,000 Net income before taxes. 140,000 Taxes.......... 46,120 Net Income. $93,880 Shares.. 40,000 2018 $1,800,000 1,120,000 680,000...
Question 2 Prepare a Statement of Cash Flows for the Year Ending December 31, 201? for the Jentayu Corporation from the following Income Statement& Balance Sheet. Jentayu Corporation Income Statement For the Year Ended 31 December, 2018(in RM Millions) RM 600 460 140 Sales (-) Cost of goods sold Gross profits (-) Operating expenses: 20 Selling expenses General & administrative expenses Total operating expenses EBITDA Depreciation expense 15 35 105 30 75 15 60 18 Interest expense EBT Taxes Net...
Just Dew It Corporation reports the following balance sheet information for 2017 and 2018 Assets 2017 2018 Current assets Cash Accounts receivable Inventory JUST DEW IT CORPORATION 2017 and 2018 Balance Sheets Liabilities and Owners' Equity 2018 2017 Current liabilities $ 14,105 Accounts payable $ 46.382 32,815 Notes payable 18,246 57,204 $ 12.157 29,382 54,632 $ 49.276 19,784 Total $ 96,171 $ 104,124 Total $ 64,628 $ 69,060 Long-term debt $ 49,000 $ 45,000 Owners' equity Common stock and paid-in...
Just Dew It Corporation reports the following balance sheet information for 2017 and 2018. JUST DEW IT CORPORATION 2017 and 2018 Balance Sheets Liabilities and Owners' Equity 2018 2017 Current liabilities 17,775 Accounts payable $ 46,875 16,425 Notes payable 19,125 56,925 Assets 2017 Current assets Cash $ 12,000 Accounts receivable 12,750 Inventory 50,250 2018 $ $ 55,575 24,750 Total $ 75,000 $ 91,125 Total $ 66,000 $ 30,000 $ 80,325 $ 27,000 Long-term debt Owners' equity Common stock and paid-in...
Please show all work. 1. Statement of Cash Flows and Standardized Financial Statements a) Net income for your firm was $10,000 last year. The depreciation expense was $2,500; accounts receivable increased $1,250; accounts payable increased $800; and inventories increased by $2,000. Identify the sources and uses of cash • What was the total cash flow from operations for the period? Operating activities = Net Income + Depreciation + Source (inflow) - Use foutflow) b) i) Prepare the 2018 common-size Income...
Woodlands Inc. 2015 Income Statement ($ in millions) Total operating revenues $3,806 Cost of goods sold 2,315 Selling, general, and administrative expenses 546 Depreciation 311 Eamings before interest and taxes (EBIT) Interest expense $634 170 $464 Pretax income Taxes 162 Net income $302 Dividends 75 Woodlands Inc. Balance Sheet ($ in millions) 2015 2014 Liabilities and Stockholders' Equity $ 503 $ 227 Accounts payable 2015 2014 $ 686$ 613 Assets Cash and equivalents Accounts receivable Inventory Net property & equipment...
Use the following tinancial statements: Dynamic Mattress Year-End Balance Sheet for 2014 (figures in $ millions) Current Liabilities: Bank loans Current Assets Cash Marketable securities Accounts receivable Inventory 49 134 183 188 Accounts payable 137 142 467 Long-term debt Total current liabilities Total current assets 84 428 Net worth (equity and retained earnings) Fixed assets Gross investment Less depreciation Net fixed assets 332 104 228 695 Total assets Total liabilities and net worth 695 Dynamic Mattress Year-End Balance Sheet for...
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