Question: How many items enter the computation of

> The comparative balance sheets of Moynihan Movie Theater Company at September 30, 2012 and 2011, reported the following: Moynihan’s transactions during the year ended September 30, 2012, included the following: Requirements 1. Prepa

> Galvin Software Corp. has assembled the following data for the year ended December 31, 2012: Requirement Prepare Galvin Software Corp.’s statement of cash flows using the indirect method to report operating activities. Include an acco

> Use the Classic Automobiles of Cedar Grove, Inc., data from Problem 12-67B. Data in Problem 12-67B Classic Automobiles of Cedar Grove, Inc., was formed on January 1, 2012. The following transactions occurred during 2012: On January 1, 2012, Classic issu

> Classic Automobiles of Cedar Grove, Inc., was formed on January 1, 2012. The following transactions occurred during 2012: On January 1, 2012, Classic issued its common stock for $430,000. Early in January, Classic made the following cash payments: a. $16

> The comparative balance sheets of Susan Saboda Design Studio, Inc., at June 30, 2012 and 2011, and transaction data for fiscal 2012, are as follows: Transaction data for the year ended June 30, 2012, follows: a. Net income, $70,600 b. Depreciation expe

> To prepare the statement of cash flows, accountants for Dora Electric Company have summarized 2012 activity in two accounts as follows: Dora’s 2012 income statement and balance sheet data follow: Requirements 1. Prepare the statemen

> Give the DuPont model formula for computing (a) Rate of return on total assets (ROA) and (b) Rate of return on common stockholders’ equity (ROE). Then answer these questions about the rate-of-return computations. 1. Explain the meaning of the component d

> Landry Furniture Gallery, Inc., provided the following data from the company’s records for the year ended March 31, 2012: a. Credit sales, $600,000 b. Loan to another company, $12,300 c. Cash payments to purchase plant assets, $82,100 d. Cost of goods so

> Suppose you manage Outward Bound, Inc., a Vermont sporting goods store that lost money during the past year. To turn the business around, you must analyze the company and industry data for the current year to learn what is wrong. The companyâ€

> Use the Summer Time Supply Corp. data from Problem 12-62A. Data in Problem 12-62A The 2012 and 2011 comparative balance sheets and 2012 income statement of Summer Time Supply Corp. follow: Requirements 1. Prepare the 2012 statement of cash flows by us

> The 2012 and 2011 comparative balance sheets and 2012 income statement of Summer Time Supply Corp. follow: Summer Time Supply had no non-cash investing and financing transactions during 2012. During the year, there were no sales of land or equipment, n

> The comparative balance sheets of Mystic Movie Theater Company at June 30, 2012, and 2011, reported the following: Mystic Movie Theater’s transactions during the year ended June 30, 2012, included the following: Requirements 1. Prep

> Stellar Software Corp. has assembled the following data for the years ending December 31, 2012 and 2011. Requirement Prepare Stellar Software Corp.’s statement of cash flows using the indirect method to report operating activities. In

> Use the Modern Automobiles of Denver, Inc., data from Problem 12-58A. Data in Problem 12-58A Modern Automobiles of Denver, Inc., was formed on January 1, 2012. The following transactions occurred during 2012: On January 1, 2012, Modern issued its common

> Modern Automobiles of Denver, Inc., was formed on January 1, 2012. The following transactions occurred during 2012: On January 1, 2012, Modern issued its common stock for $280,000. Early in January, Modern made the following cash payments: a. $120,000 fo

> Income Tax Payable was $5,000 at the end of the year and $2,600 at the beginning. Income tax expense for the year totaled $58,900. What amount of cash did the company pay for income tax during the year? a. $56,500 b. $58,900 c. $61,300 d. $61,500

> Credit sales totaled $750,000, accounts receivable increased by $60,000, and accounts payable decreased by $40,000. How much cash did the company collect from customers? a. $690,000 b. $810,000 c. $730,000 d. $750,000

> Compute the following items for the statement of cash flows: a. Beginning and ending Accounts Receivable are $23,000 and $27,000, respectively. Credit sales for the period total $67,000. How much are cash collections from customers? b. Cost of goods sold

> Turnberry Golf Corporation’s long-term debt agreements make certain demands on the business. For example, Turnberry may not purchase treasury stock in excess of the balance of retained earnings. Also, long-term debt may not exceed stockholders’ equity, a

> The following data (dollar amounts in millions) are from the financial statements of Valley Corporation: Average stockholders’ equity............................... $5,400 Interest expense................................................

> The following data (dollar amounts in millions) are taken from the financial statements of Number 1 Industries, Inc.: Total liabilities.................................... $12,500 Total current assets........................... $13,500 Accumulated deprec

> Assume that you are considering purchasing stock as an investment. You have narrowed the choice to Topline.com and E-shop Stores and have assembled the following data. Selected income statement data for current year: Selected balance sheet and market p

> Comparative financial statement data of Panfield Optical Mart follow: Other information: 1. Market price of Panfield common stock: $94.38 at December 31, 2012, and $85.67 at December 31, 2011 2. Common shares outstanding: 15,000 during 2012 and 10,000

> Financial statement data of Eastland Engineering include the following items: Requirements 1. Compute Eastland’s current ratio, debt ratio, and earnings per share. (Round all ratios to two decimal places.) 2. Compute the three ratios

> Solomon’s net cash flow from financing activities for 2012 was (Assume no stock dividends were distributed.) a. Net cash used of $25,500. b. Net cash provided of $12,000. c. Net cash provided of $42,000. d. Net cash used of $14,500. So

> You are evaluating two companies as possible investments. The two companies, which are similar in size, are commuter airlines that fl y passengers up and down the West Coast. All other available information has been analyzed, and your investment decision

> Top managers of Gilligan Products, Inc., have asked for your help in comparing the company’s profit performance and financial position with the average for the industry. The accountant has given you the company’s incom

> Net sales, net income, and total assets for Azbell Shipping, Inc., for a five-year period follow: Requirements 1. Compute trend percentages for each item for 2009 through 2012. Use 2008 as the base year and round to the nearest percent. 2. Compute the

> Copperhead, Inc., has the following stockholders’ equity: Preferred stock, 1%, $12 par, 35,000 shares authorized and issued............................... $ 420,000 Common stock, $8 par, 100,000 shares authorized, 67,000 shares issued....................

> Assume that you are considering purchasing stock as an investment. You have narrowed the choice to CDRom.com and Web Stores and have assembled the following data. Selected income statement data for the current year: Selected balance sheet and market pr

> Comparative financial statement data of Hamden Optical Mart follow: Other information: 1. Market price of Hamden common stock: $102.17 at December 31, 2012, and $77.01 at December 31, 2011 2. Common shares outstanding: 18,000 during 2012 and 17,500 dur

> Financial statement data of Shawsworth Engineering include the following items: Requirements 1. Compute Shawsworth’s current ratio, debt ratio, and earnings per share. (Round all ratios to two decimal places.) 2. Compute the three rat

> You are evaluating two companies as possible investments. The two companies, which are similar in size, are commuter airlines that fly passengers up and down the West Coast. All other available information has been analyzed, and your investment decision

> Top managers of O’Hare Products, Inc., have asked for your help in comparing the company’s profit performance and financial position with the average for the industry. The accountant has given you the companyâ&#1

> Net sales, net income, and total assets for Aaron Shipping, Inc., for a five-year period follow: Requirements 1. Compute trend percentages for each item for 2009 through 2012. Use 2008 as the base year and round to the nearest percent. 2. Compute the r

> Witkum, Inc., reported the following sales and net income amounts: Show Witkum’s trend percentages for sales and net income. Use 2009 as the base year. (In thousands) 2012 2011 2010 2009 Sales. $9,960 $9,260 $8,790 $8,590 Net inco

> Solomon’s largest financing cash flow for 2012 resulted from (Assume no stock dividends were distributed.) a. Sale of equipment. b. Purchase of equipment. c. Payment of dividends. d. Issuance of common stock. Solomon Corporation format

> Assume that you are a financial analyst. You are trying to compare the financial statements of Caterpillar, Inc., with those of CNH Global , an international company that uses international financial reporting standards (IFRS). Caterpillar, Inc., uses th

> Verifine Corporation reported the following amounts on its 2012 comparative income statements: Perform a horizontal analysis of revenues and net income—both in dollar amounts and in percentages—for 2012 and 2011.

> Payne Bancshares has 18,000 shares of $4 par common stock outstanding. Suppose Payne distributes an 8% stock dividend when the market value of its stock is $20 per share. 1. Journalize Payne’s distribution of the stock dividend on May 11. An explanation

> Based on the EVA® analysis, Karin Oil Pipeline appears to be the better investment. Requirements 1. Before performing any calculations, which company do you think represents the better investment? Give your reason. 2. Compute the EVAÂ&

> Evaluate the common stock of Orville Distributing Company as an investment. Specifically, use the three common stock ratios to determine whether the common stock increased or decreased in attractiveness during the past year. (Round calculations and your

> Compute return on sales (ROS), asset turnover (AT), return on assets (ROA), leverage (L), return on common stockholders’ equity (ROE), gross profit (GP), operating income percentage (OI), and earnings per share (EPS), to measure the abi

> Evensen Furniture Company has requested that you determine whether the company’s ability to pay its current liabilities and long-term debts improved or deteriorated during 2012. To answer this question, compute the following ratios for

> The financial statements of Alliance News, Inc., include the following items: Requirements 1. Compute the following ratios for 2012 and 2011: a. Current ratio b. Quick (acid test) ratio c. Inventory turnover and days’ inventory outsta

> Identify any weaknesses revealed by the statement of cash flows of Florida Oranges, Inc. Florida Oranges, Inc. Statement of Cash Flows For the Current Year Opcrating activitics: Net income $ 95,000 Add (subtract) noncash items: Depreciation $ 32,000

> Prepare a comparative common-size income statement for McCracken Music Co. using the 2012 and 2011 data of Exercise 13-27B and rounding to four decimal places. Data of Exercise 13-27B McCracken Music Co. Comparative Income Statements Years Ended Dec

> Drive Golf Company has requested that you perform a vertical analysis of its balance sheet to determine the component percentages of its assets, liabilities, and stockholders’ equity. Drive Golf Company Balance Sheet December 31, 2

> Compute trend percentages for Maple Valley Sales & Service’s total revenue and net income for the following five-year period, using year 0 as the base year. Round to the nearest full percent. Which grew faster during the period, t

> Sterling Garde, Inc., has 90,000 shares of $1.35 preferred stock outstanding in addition to its common stock. The $1.35 designation means that the preferred stockholders receive an annual cash dividend of $1.35 per share. In 2012, Sterling Garde declares

> Modern Brands recently completed a large debt refinancing. A debt refinancing occurs when a company issues new bonds payable to retire old bonds. The company debits the old bonds payable and credits the new bonds payable. Modern Brands had $160 million o

> Prepare a horizontal analysis of the comparative income statements of McCracken Music Co. Round percentage changes to the nearest one-tenth percent (three decimal places). McCracken Music Co. Comparative Income Statements Years Ended December 31, 20

> What were the dollar amount of change and the percentage of each change in Cobb Hill Lodge’s working capital during 2012 and 2011? Is this trend favorable or unfavorable? 2012 2011 2010 Total current asscts .. $60,000 $230,000 $250

> Two companies with different economic-value-added (EVA®) profiles are Emerson Oil Pipeline Incorporated and Farmer Bank Limited. Adapted versions of the two companies’ financial statements are presented here (in millions):

> Evaluate the common stock of Tristan Distributing Company as an investment. Specifically, use the three common stock ratios to determine whether the common stock increased or decreased in attractiveness during the past year. (Round calculations and your

> Compute return on sales (ROS), asset turnover (AT), return on assets (ROA), leverage (L), return on common stockholders’ equity (ROE), gross profit (GP), operating income percentage (OI), and earnings per share (EPS), to measure the abi

> Branson Furniture Company has requested that you determine whether the company’s ability to pay its current liabilities and long-term debts improved or deteriorated during 2012. To answer this question, compute the following ratios for

> The financial statements of Family News, Inc., include the following items: Requirements 1. Compute the following ratios for 2012 and 2011: a. Current ratio b. Quick (acid test) ratio c. Inventory turnover and days’ inventory outstand

> Identify any weaknesses revealed by the statement of cash flows of New York Apple Farms, Inc. New York Apple Farms, Inc. Statement of Cash Flows For the Current Year Opcrating activitics: Net income 67,100 Add (subtract) noncash items: Depreciation

> Prepare a comparative common-size income statement for McMahon Music Co., using the 2012 and 2011 data of Exercise 13-16A and rounding to four decimal places. Data in Exercise 13-16A McMahon Music Co. Comparative Income Statements Years Ended Decemb

> Putt Golf Company has requested that you perform a vertical analysis of its balance sheet to determine the component percentages of its assets, liabilities, and stockholders’ equity.

> Greenwood Corporation earned net income of $85,000 during the year ended December 31, 2012. On December 15, Greenwood declared the annual cash dividend on its 8% preferred stock (20,000 shares with total par value of $200,000) and a $0.15 per share cash

> The book value of equipment sold during 2012 was $20,000. Solomon’s net cash flow from investing activities for 2012 was a. Net cash used of $38,000. b. Net cash used of $47,000. c. Net cash used of $44,000. d. Net cash used of $25,500.

> Compute trend percentages for Peak Valley Sales & Service’s total revenue and net income for the following five-year period, using year 0 as the base year. Round to the nearest full percent. Which grew faster during the period, to

> Prepare a horizontal analysis of the comparative income statements of McMahon Music Co. Round percentage changes to the nearest one-tenth percent (three decimal places). McMahon Music Co. Comparative Income Statements Years Ended December 31, 2012 a

> What were the dollar amount of change and the percentage of each change in Blueberry Lane Lodge’s working capital during 2012 and 2011? Is this trend favorable or unfavorable? 2012 2011 2010 Total current assets $330,000 $280,000 $

> Compute economic value added (EVA®) for Lazeren Software. The company’s cost of capital is 3%. Net income was $755 thousand, interest expense $401 thousand, beginning long-term debt $620 thousand, and beginning stockholders’ equity was $3,010 thousand. R

> Take the role of an investment analyst at Cole Binder. It is your job to recommend investments for your client. The only information you have is the following ratio values for two companies in the graphics software industry. Write a report to the Cole

> A skeleton of Westview Country Florist’s balance sheet appears as follows (amounts in thousands): Use the following ratio data to complete Westview Country Florist’s balance sheet: a. Debt ratio is 0.57. b. Current r

> A skeleton of Westview Country Florist’s income statement appears as follows (amounts in thousands): Income Statement Net sales …………………………………………………….. $7,300 Cost of goods sold ………………….………………………….. (a) Selling expenses …………………….……………………… 1,520 Administra

> The annual report of Feeney Cars, Inc., for the year ended December 31, 2012, included the following items (in millions): Preferred stock outstanding, 3% ........................................ $700 Net income............................................

> Use the financial statements of Allstott, Inc., in Short Exercises 13-6 and 13-7 to compute these profitability measures for 2012. Show each computation. a. Rate of return on sales b. Asset turnover c. Rate of return on total assets. d. Leverage (equity

> Karen Knox Exports, Inc., is located in Clancy, New Mexico. Knox is the only company with reliable sources for its imported gifts. The company does a brisk business with specialty stores such as Neiman Marcus. Knox’s recent success has made the company a

> Use the financial statements of Allstott, Inc., in Short Exercises 13-6 and 13-7. 1. Compute the company’s debt ratio at December 31, 2012. 2. Compute the company’s times-interest-earned ratio for 2012. For operating i

> How many items enter the computation of Solomon’s net cash flow from investing activities for 2012? a. 5 b. 3 c. 2 d. 7 Solomon Corporation formats operating cash flows by the indirect method. *The book value of equipment sold during

> Use the Allstott 2012 income statement that follows and the balance sheet from Short Exercise 13-6 to compute the following: a. Allstott’s rate of inventory turnover and days inventory outstanding for 2012 b. Days’

> Use the Allstott, Inc., balance sheet data on the following page. 1. Compute Allstott, Inc.’s quick (acid-test) ratio at December 31, 2012 and 2011. 2. Use the comparative information from the table on the bottom of page 811 for Baker,

> Examine the financial data of Stephens Corporation. Show how to compute Stephens current ratio for each year 2010 through 2012. Is the company’s ability to pay its current liabilities improving or deteriorating? Year Ended Decembe

> Craft, Inc., and Kleen Corporation are competitors. Compare the two companies by converting their condensed income statements to common size. Which company earned more net income? Which company’s net income was a higher percentage of

> McCormick Software reported the following amounts on its balance sheets at December 31, 2012, 2011, and 2010: Sales and profits are high. Nevertheless, McCormick is experiencing a cash shortage. Perform a vertical analysis of McCormick Softwareâ&

> Refer to the RadioShack Corporation, consolidated financial statements in Appendix B at the end of this book. Focus on the year ended December 31, 2010. 1. What is RadioShack Corporation’s main source of cash? Is this good news or bad news to RadioShack

> Use Amazon.com, Inc.’s consolidated statement of cash flows along with the company’s other consolidated financial statements, all in Appendix A at the end of the book, to answer the following questions. Requirements 1. By which method does Amazon.com, I

> The 2012 income statement and the 2012 comparative balance sheet of T-Bar-M Camp, Inc., have just been distributed at a meeting of the camp’s board of directors. The directors raise a fundamental question: Why is the cash balance so low

> Gellman Marketing Corporation reported the following stockholders’ equity at December 31 (adapted and in millions): Common stock...................................... $ 256 Additional paid-in capital....................... 286 Retained earnings..........

> The accounting records of Jasmine Pharmaceuticals, Inc., reveal the following: Requirement Compute cash flows from operating activities by the direct method. Also evaluate Jasmine’s operating cash flow. Give the reason for your evalua

> Compute the following items for the statement of cash flows: a. Beginning and ending Plant Assets, Net, are $125,000 and $115,000, respectively. Depreciation for the period was $19,000, and purchases of new plant assets were $45,000. Plant assets were so

> Solomon’s net cash provided by operating activities during 2012 was a. $41,000. b. $47,000. c. $38,000. d. $44,000. Solomon Corporation formats operating cash flows by the indirect method. *The book value of equipment sold during 201

> Consider three independent cases for the cash flows of Texas Tires Corp. For each case, identify from the statement of cash flows how Texas Tires Corp. generated the cash to acquire new plant assets. Rank the three cases from the most healthy financially

> The income statement and additional data of Breen Travel Products, Inc., follow: Additional data: a. Acquisition of plant assets was $200,000. Of this amount, $160,000 was paid in cash and $40,000 by signing a note payable. b. Proceeds from sale of lan

> The accounting records of Ashby Fur Traders include these accounts: Requirement Compute Ashby’s net cash provided by (used for) operating activities during August. Use the indirect method. Do you see any potential problems in Ashby&ac

> The accounting records of South Central Distributors, Inc., reveal the following: Requirement Compute cash flows from operating activities by the indirect method. Use the format of the operating activities section of Exhibit 12-6. Also evaluate the ope

> Indicate whether each of the following transactions affects an operating activity, an investing activity, a financing activity, or a non-cash investing and financing activity. 61,000 8. Equipment 11,000 a. Cash Common Stock 10,000 Cash 11,000 51,000

> Carter-Pierce Investments specializes in low-risk government bonds. Identify each of Carter-Pierce’s transactions as operating (O), investing (I), financing (F), non-cash investing and financing (NIF), or a transaction that is not reported on the stateme

> Compute the following items for the statement of cash flows: a. Beginning and ending Accounts Receivable are $21,000 and $17,000, respectively. Credit sales for the period total $66,000. How much are cash collections from customers? b. Cost of goods sold

> Refer to the data in S10-8. Using only year-end figures rather than averages, compute the following for Ridgeview Employment Services: a. Net income b. Total liabilities c. Total assets (use the accounting equation) d. Net profit ratio e. Asset turnover

> The income statement and additional data of One Stop, Inc., follow: Additional data: a. Collections from customers are $20,000 more than sales. b. Payments to suppliers are $1,200 less than the sum of cost of goods sold plus advertising expense. c. Pay

> Selected accounts of Jessie Antiques show the following: Requirement For each account, identify the item or items that should appear on a statement of cash flows prepared by the direct method. State where to report the item. Salary Payable Beginnin

> The accounting records of Best Pharmaceuticals, Inc., reveal the following: Requirement Compute cash flows from operating activities by the direct method. Also evaluate Best’s operating cash flow. Give the reason for your evaluation.

> How do accounts receivable affect Solomon’s cash flows from operating activities for 2012? a. Decrease in cash provided by operating activities b. Increase in cash provided by operating activities c. They don’t because

> Compute the following items for the statement of cash flows: a. Beginning and ending Plant Assets, Net, are $99,000 and $92,000, respectively. Depreciation for the period was $11,000, and purchases of new plant assets were $23,000. Plant assets were sold