# Ans Doc 120

Question 1

Indicate which statement you would examine to find each of the following items: income statement, balance sheet, retained earnings statement, or statement of cash flows.
(a) Revenue during the period.
(b) Supplies on hand at the end of the year.
(c) Cash received from issuing new bonds during the period.
(d) Total debts outstanding at the end of the period.

Question 2

use the basic accounting equation to answer these questions.
(a) The liabilities of Cummings Company are \$90,000 and the stockholders’ equity is \$230,000. What is the amount of Cummings Company’s total assets?
(b) The total assets of Haldeman Company are \$170,000 and its stockholders’ equity is \$90,000. What is the amount of its total liabilities?
(c) The total assets of Dain Co. are \$800,000 and its liabilities are equal to one-fourth of its total assets. What is the amount of Dain Co.’s stockholders’ equity?
Assets = Liabilities + Stockholders’ Equity
(a) \$ \$ \$
(b) \$ \$ \$
(c) \$ \$ \$

Question 3

At the beginning of the year, Fuqua Company had total assets of \$800,000 and total liabilities of \$500,000.
(a) If total assets increased \$150,000 during the year and total liabilities decreased \$80,000, what is the amount of stockholders’ equity at the end of the year?
(b) During the year, total liabilities increased \$100,000 and stockholders’ equity decreased \$70,000. What is the amount of total assets at the end of the year.
(c) If total assets decreased \$90,000 and stockholders’ equity increased \$110,000 during the year, what is the amount of total liabilities at the end of the year?
Assets = Liabilities + Stockholders’ Equity
(a) \$ \$ \$
(b) \$ \$ \$
(c) \$ \$ \$

The next three questions I can wait until this Thursday

Question 1

The comparative balance sheets of Nike, Inc. are presented here.

NIKE INC.
Comparative Balance Sheets
May 31
(\$ in millions)
Assets 2007 2006
Current assets \$8,076 \$7,346
Property, plant, and equipment (net) 1,678 1,658
Other assets 934 866
Total assets \$10,688 \$9,870

Liabilities and Stockholders’ Equity
Current liabilities \$2,584 \$2,612
Long-term liabilities 1,079 973
Stockholders’ equity 7,025 6,285
Total liabilities and stockholders’ equity \$10,688 \$9,870

Complete the horizontal analysis of the balance sheet data for Nike using 2006 as a base. (If amount decreases, use either a negative sign preceding the number, e.g. -45 or parenthesis, e.g. (45). Round all percentages to 1 decimal place, e.g. 12.5.)
NIKE, INC.
Condensed Balance Sheet
December 31
(\$ in millions)
Increase or (Decrease)
2007 2006 Amount Percentage
Assets
Current assets \$8,076 \$7,346 \$ %
Property, plant and equipment (net) 1,678 1,658 %
Other assets 934 866 %
Total assets \$10,688 \$9,870 \$ %

Liabilities and stockholders’ equity
Current liabilities \$2,584 \$2,612 \$ %
Long-term liabilities 1,079 973 %
Total stockholders’ equity 7,025 6,285 %
Total liabilities & stockholders’ equity \$10,688 \$9,870 \$ %

Complete the vertical analysis of the balance sheet data for Nike for 2007. (Round all of the percentages to 1 decimal place, e.g. 12.5.)
NIKE, INC.
Condensed Balance Sheet
May 31, 2007
\$ (in millions) Percent
Assets
Current assets \$8,076 %
Property, plant and equipment (net) 1,678 %
Other assets 934 %
Total assets \$10,688 %

Liabilities and stockholders’ equity
Current liabilities \$2,584 %
Long-term liabilities 1,079 %
Stockholders’ equity 7,025 %
Total liabilities and stockholder’s equity \$10,688 %

Question 2

Here are the comparative income statements of Winfrey Corporation.

WINFREY CORPORATION
Comparative Income Statements
For the Years Ended December 31
2010 2009
Net sales \$598,000 \$520,000
Cost of goods sold 477,000 450,000
Gross profit \$121,000 \$70,000
Operating expenses 80,000 45,000
Net income \$41,000 \$25,000

Complete the horizontal analysis of the income statement data for Winfrey Corporation using 2009 as a base. (Round all percentages to 1 decimal place, e.g. 12.5.)
WINFREY CORPORATION
Condensed Income Statements
For the Years Ended December 31
Increase or (Decrease)
During 2010
2010 2009 Amount Percentage
Net sales \$598,000 \$520,000 \$ %
Cost of goods sold 477,000 450,000 %
Gross profit 121,000 70,000 %
Operating expenses 80,000 45,000 %
Net income \$41,000 \$25,000 \$ %

Complete the vertical analysis of the income statement data for Winfrey Corporation for both years. (Round all percentages to 1 decimal place, e.g. 12.5.)
WINFREY CORPORATION
Condensed Income Statements
For the Years Ended December 31
2010 2009
\$ Percent \$ Percent
Net sales \$598,000 % \$520,000 %
Cost of goods sold 477,000 % 450,000 %
Gross profit 121,000 % 70,000 %
Operating expenses 80,000 % 45,000 %
Net income \$41,000 % \$25,000 %

Question 3

Armada Company has these comparative balance sheet data:
Balance Sheets
December 31
2010 2009
Cash \$25,000 \$30,000
Receivables (net) 65,000 60,000
Inventories 60,000 50,000
Plant assets (net) 200,000 180,000
\$350,000 \$320,000

Accounts payable \$50,000 \$60,000
Mortgage payable (15%) 100,000 100,000
Common stock, \$10 par 140,000 120,000
Retained earnings 60,000 40,000
\$350,000 \$320,000
Additional information for 2010:
1. Net income was \$25,000.
2. Sales on account were \$375,000. Sales returns and allowances amounted to \$25,000.
3. Cost of goods sold was \$198,000.
4. Net cash provided by operating activities was \$48,000.
5. Capital expenditures were \$25,000, and cash dividends were \$18,000.
Compute the following ratios at December 31, 2010. (Round to 3 decimal places, e.g. 2.515.)
Current :1
Receivables turnover times
Average collection period days
Inventory turnover times
Days in inventory days
Cash debt coverage times
Current cash debt coverage times
Free cash flow \$