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Assignment 1 IBF

The document provides a scrambled list of accounting items and 6 questions asking to reconstruct financial statements, calculate ratios, and analyze a company's financial condition based on the statements. It contains income statement and balance sheet line items mixed together, as well as questions asking to calculate earnings per share, dividends, working capital, and equity. The questions require identifying and organizing the line items, performing calculations, and preparing complete financial statements to analyze the companies.

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Sameer Asif
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37 views

Assignment 1 IBF

The document provides a scrambled list of accounting items and 6 questions asking to reconstruct financial statements, calculate ratios, and analyze a company's financial condition based on the statements. It contains income statement and balance sheet line items mixed together, as well as questions asking to calculate earnings per share, dividends, working capital, and equity. The questions require identifying and organizing the line items, performing calculations, and preparing complete financial statements to analyze the companies.

Uploaded by

Sameer Asif
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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February 03, 2016

Assignment 1

Question No: 1

Accounts payable $ 180,000 Accounts receivable 350,000 Accrued expenses 35,000 Accumulated
depreciation 400,000 Cash 50,000 Common equity 480,000 Cost of goods sold 1,200,000 Current assets
625,000 Current liabilities 365,000 Earnings before taxes 480,000 Gross profit 800,000 Income taxes
120,000 Interest expense 70,000 Inventories 225,000 Long-term debt 580,000 Net income 360,000 Net
operating income 550,000 Net plant and equipment 800,000 Operating expenses 250,000 Plant and
equipment 1,200,000 Revenues 2,000,000 Short-term notes payable 150,000 Total assets 1,425,000
Total liabilities and owner’s equity 1,425,000

a. Reconstruct the income statement and balance sheet of the Marion Corporation from the
scrambled list of statement entries found above.
b. Calculate EPS if company issued 1million Outstanding shares
c. If company paid a dividend of $0.12 per share. What is the total retained earnings?

Question No: 2

The Sandifer Manufacturing Co. had $4,500,000 in revenues, $3,375,000 in cost of goods sold, $450,000
in operating expenses which included depreciation expense of $150,000, and had a tax liability equal to
35% of the firm’s taxable income. What is the net income of the firm for the year?

Question No: 3

If the Marifield Steel Fabrication Company earned $500,000 in net income and paid a cash dividend of
$300,000 to its preffered stockholders, what are the firm’s earnings per share if the firm has 100,000
shares of stock outstanding?

Question No: 4

The Caraway Seed Company grows heirloom tomatoes and sells their seeds. The heirloom tomato plants
are preferred by many growers for their superior flavor. At the end of the most recent year the firm had
current assets of $50,000, net fixed assets of $250,000, current liabilities of $30,000, and long-term debt
of $100,000.

a. Calculate Caraway’s stockholders’ equity


b. What is the firm’s net working capital?
c. If Caraway’s current liabilities consist of $20,000 in accounts payable and $10,000 in short-term
debt (notes payable), what is the firm’s net working capital?
Question No: 5

A scrambled list of accounts from the income statement and balance sheet of Belmond, Inc. is found
below:

Inventory $ 6,500 Common stock 45,000 Cash 16,550 Operating expenses 1,350 Short-term notes
payable 600 Interest expense 900 Depreciation expense 500 Sales 12,800 Accounts receivable 9,600
Accounts payable 4,800 Long-term debt 55,000 Cost of goods sold 5,750 Buildings and equipment
122,000 Accumulated depreciation 34,000 Taxes 1,440 General and administrative expense 850
Retained earnings ? .

a. How much is the firm’s net working capital?

b. Complete an income statement and a balance sheet for Belmond.

Question No: 6

Prepare a balance sheet and income statement for the Warner Company from the following scrambled
list of items found below:

Depreciation expense $ 66,000, Cash 225,000 Long-term debt 334,000 Sales 573,000 Accounts payable
102,000 General and administrative expense 79,000 Buildings and equipment 895,000 Notes payable
75,000 Accounts receivable 167,500 Interest expense 4,750 Accrued expenses 7,900 Common stock
289,000 Cost of goods sold 297,000 Inventory 99,300 Taxes 50,500 Accumulated depreciation 263,000
Taxes payable 53,000 Retained earnings 262,900

a. Prepare an income statement for the Warner Company.

b. Prepare a balance sheet for the Warner Company.

c. What can you say about the firm’s financial condition based on these financial statements?

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