The Bombay Company, Inc., sold a line of home furnishings that included furniture, wall decor, and decorative accessories. Bombay operated through a network of retail locations throughout the United States and Canada, as well as through its direct-to-customer operations and international licensing arrangements. The company was forced to file for bankruptcy. In its last financial statement prior to bankruptcy, Bombay reported current assets of $161,604,000 and current liabilities of $113,909,000. Required: Determine the impact of the following independent transactions on the current ratio for Bombay: 1. Sold long-term assets for cash. 2. Accrued severance pay and benefits for employees who were terminated. 3. Wrote down the carrying value of certain inventory items that were deemed to be obsolete. 4. Acquired new inventory; supplier was not willing to provide normal credit terms, so an 18-month interest-bearing note was signed.
> Develop a flowchart for one of the following: a) Filling up with gasoline at a self-serve station. b) Determining your account balance and making a withdrawal at an ATM. c) Getting a cone of yogurt or ice cream from an ice cream store.
> Use Pareto analysis to investigate the following data collected on a printed-circuit-board assembly line: a) Prepare a graph of the data. b) What conclusions do you reach? NUMBER OF DEFECT DEFECT OCCURRENCES Components not adhering 143 Excess adhes
> Within the food service industry (restaurants that serve meals to customers, but not just fast food), find examples of firms that have sustained competitive advantage by competing on the basis of (1) cost leadership, (2) response, and (3) differentiation
> Mary Beth Marrs, the manager of an apartment complex, feels overwhelmed by the number of complaints she is receiving. Below is the check sheet she has kept for the past 12 weeks. Develop a Pareto chart using this information. What recommendations would y
> Draw a fish-bone chart depicting the reasons that might give rise to an incorrect fee statement at the time you go to pay for your registration at school.
> Construct a cause-and-effect diagram to reflect “student dissatisfied with university registration process.” Use the “four M s” or create your own organizing scheme. Include at least 12 causes.
> Consider the everyday task of getting to work on time or arriving at your first class on time in the morning. Draw a fish-bone chart showing reasons why you might arrive late in the morning.
> Draw a fish-bone chart detailing reasons why an airline customer might be dissatisfied.
> Consider the types of poor driving habits that might occur at a traffic light. Make a list of the 10 you consider most likely to happen. Add the category of “other” to that list. a) Compose a check sheet [like that in Figure 6.6 (a)] to collect the frequ
> Develop a flowchart [as in Figure 6.6 (e) and Example 2] showing all the steps involved in planning a party. Reference Figure 6.6: Tools for Generating Ideas (a) Check Sheet An oganired method of mcording data (c) Cause-and Efoct Diagmm A tool that
> Develop a histogram of the time it took for you or your friends to receive six recent orders at a fast-food restaurant.
> Develop a Pareto chart of the following causes of poor grades on an exam: REASON FOR POOR GRADE FREQUENCY Insufficient time to complete 15 Late arrival to exam 7 Difficulty understanding material 25 Insufficient preparation time 2 Studied wrong mate
> Develop a scatter diagram for two variables of interest [say pages in the newspaper by day of the week; see the example in Figure 6.6 (b)]. Reference Figure 6.6: Tools for Generating Ideas (a) Check Shoet: Anoganizod mothod of recording data (b) Sc
> The text provides three primary strategic approaches (differentiation, cost, and response) for achieving competitive advantage. Provide an example of each not given in the text. Support your choices.
> Why is it necessary to document a product explicitly?
> How is the dividend yield ratio calculated? Explain what the dividend yield ratio tells you about a company.
> Sales for the year for Victor Company were $1,000,000, 70 percent of which were on credit. The average gross profit on sales was 40 percent. Additional account balances were: Required: Compute the turnover for the accounts receivable and inventory, the
> Procter & Gamble is a multinational corporation that manufactures and markets many household products. Last year, sales for the company were $83,062 (all amounts in millions). The annual report did not disclose the amount of credit sales, so we will
> How is the earnings per share (EPS) ratio calculated? On what financial statement will an investor find EPS for a given company?
> The balance sheet for Ronlad Corporation reported 168,000 shares outstanding, 268,000 shares authorized, and 10,000 shares in treasury stock. How many shares have been issued?
> There are two primary sources of equity reported in the stockholders’ equity section of a company’s balance sheet: contributed capital and earned capital. Earned capital is kept track of in the retained earnings account. What increases retained earnings
> An Internet company earned $6.50 per share and paid dividends of $3.50 per share. The company reported a dividend yield of 5 percent. What was the price of the stock?
> In the current year, Pringle Company reported Sales of $1,420,000, Interest Expense of $12,000, Income Tax Expense of $13,000, and Net Income of $52,000. What is Pringle’s times interest earned ratio?
> Stacy Company reported total assets of $1,400,000 and noncurrent assets of $480,000. The company also reported a current ratio of 3.5. What amount of current liabilities did the company report?
> Compute the financial leverage percentage for Year 2 given the following data: Year 2 Year 1 Return on equity 21.00% 26.00% Return on assets 6.00 8.00 Profit margin 12.00 12.00
> Compute the return on equity ratio for Year 2 given the following data: Year 2 Year 1 $ 183,000 $ 159,000 1,250,000 Net income Stockholders' equity 1,100,000 Total assets 2,460,000 2,630,000 Interest expense 42,000 32,000
> A consumer products company reported a 5.4 percent increase in sales from Year 1 to Year 2. Sales in Year 1 were $29,600. In Year 2, the company reported cost of goods sold in the amount of $9,107. What was the gross profit percentage in Year 2?
> A large retailer reported revenue of $1,665,000. The company’s gross profit percentage was 44 percent. What amount of cost of goods sold did the company report?
> In a recent annual report, Outerwall Inc. (formerly Redbox) disclosed that 60,000,000 shares of common stock have been authorized. At the beginning of the fiscal year, a total of 36,356,357 shares had been issued and the number of shares in treasury stoc
> Wakon Company earned $3.25 per share and paid dividends of $0.75 per share. The company reported a dividend yield of 3 percent. What was the price of Wakon’s stock?
> The Bombay Company, Inc., sold a line of home furnishings that included furniture, wall decor, and decorative accessories. Bombay operated through a network of retail locations throughout the United States and Canada, as well as through its direct-to-cus
> Sales for the year for Victor Company were $1,000,000, 70 percent of which were on credit. The average gross profit on sales was 40 percent. Additional account balances were: Required: Compute the turnover for the accounts receivable and inventory, the
> Procter & Gamble is a multinational corporation that manufactures and markets many household products. Last year, sales for the company were $83,062 (all amounts in millions). The annual report did not disclose the amount of credit sales, so we will
> Based on the following information, compute cash flows from financing activities. Purchase of short-term investments…………………………….. .$ 500 Dividends paid …………………………………………………………………700 Interest paid ………………………………………………………………….…300 Additional short-term borrow
> Based on the following information, compute cash flows from investing activities. Cash collections from customers………………………………….. $550 Sale of used equipment ………………………………………………….400 Depreciation expense ……………………………………………………..200 Purchase of short-term inv
> Casey Corporation reported net income of $102,000, depreciation expense of $2,000, and cash flow from operations of $86,500. Compute the quality of income ratio. What does the ratio tell you about the company’s ability to finance operating and other cash
> A recent statement of cash flows for Apple contained the following information (dollars in millions): Operations Net income …………………………………………………….$25,922 Depreciation ………………………………………………………..1,814 Changes in assets and liabilities Accounts receivabl
> Procter & Gamble (P&G) brands touch the lives of people around the world in 180 countries and territories. The P&G community consists of nearly 188,000 employees. In 2014, the company had 10 billion shares of common stock authorized, 4 billion shares iss
> A recent statement of cash flows for Colgate-Palmolive reported the following information (dollars in millions): Operating Activities Net income ………………………………………………………….$2,554 Depreciation ……………………………………………………………..421 Cash effect of changes in Receiva
> The charter of Vista West Corporation specifies that it is authorized to issue 300,000 shares of common stock. Since the company was incorporated, it has sold a total of 160,000 shares (at $16 per share) to the public. It has bought back a total of 25,00
> Parra Company completed its income statement and comparative balance sheet for the current year and provided the following information: Required: Present the operating activities section of the statement of cash flows for Parra Company using the indirec
> The following information pertains to Peak Heights Company: Required: Present the operating activities section of the statement of cash flows for Peak Heights Company using the indirect method. Income Statement for Current Year Sales $93,000 Expense
> Apple Inc. designs, manufactures, and markets mobile communication and media devices, personal computers, and portable digital music players. In 2014, Apple had the largest market value of any company. Apple has over 92,000 full-time employees. The compa
> During the year, University Food Systems issued stock, repurchased stock, declared a cash dividend, and declared a 2-for-1 stock split. How will each of these transactions affect University’s statement of cash flows?
> Reliable Tools, Inc., announced a 100 percent stock dividend. Determine the impact (increase, decrease, no change) of this dividend on the following: 1. Total assets 2. Total liabilities 3. Common stock 4. Total stockholders’ equity 5. Market value per s
> On April 15 of this year, the board of directors for Jedi Company declared a cash dividend of 65 cents per share payable to stockholders of record on May 20. The dividends will be paid on June 14. The company has 100,000 shares of stock outstanding. Prep
> Wakon Company earned $3.25 per share and paid dividends of $0.75 per share. The company reported a dividend yield of 3 percent. What was the price of Wakon’s stock?
> Cole Company has 288,000 shares of common stock authorized, 260,000 shares issued, and 60,000 shares of treasury stock. The company’s board of directors has declared a dividend of 65 cents per share. What is the total amount of the dividend that will be
> The price/earnings ratio provides important information concerning the stock market’s assessment of the growth potential of a business. The following are price/earnings ratios for selected companies. Match the company with its ratio and
> A recent annual report for Apple Inc. contained the following information (dollars in thousands): Stockholders’ Equity 2014 Common stock, $0.00001 par value,
> Audio House, Inc., is developing its annual financial statements at December 31, current year. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized as follows: Ad
> Ingersol Construction Supply Company is developing its annual financial statements at December 31, current year. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summari
> Differentiate between cumulative and noncumulative preferred stock.
> What are the usual characteristics of preferred stock?
> Identify and explain the three important dates with respect to dividends.
> Define stock split. How does a stock split differ from a stock dividend?
> Define stock dividend. How does a stock dividend differ from a cash dividend?
> What are the two basic requirements to support the declaration of a cash dividend? What are the effects of a cash dividend on assets and stockholders’ equity?
> How is treasury stock reported on the balance sheet? How is the “gain or loss” on the resale of treasury stock reported on the financial statements?
> Define treasury stock. Why do corporations acquire treasury stock?
> Assume that you are a financial analyst for a large investment banking firm. You are responsible for analyzing companies in the retail sales industry. You have just learned that a large West Coast retailer has acquired a large East Coast retail chain for
> Explain the difference between contributed capital and earned capital. How is each represented in the stockholders’ equity section of a company’s balance sheet?
> Define additional paid-in capital.
> Explain the distinction between par value and no-par value stock
> Differentiate between common stock and preferred stock.
> Explain each of the following terms: (a) authorized shares, (b) issued shares, and (c) outstanding shares.
> What is a corporate charter?
> Define the term corporation and identify the primary advantages of this form of business organization.
> On January 1, Biofuel Corporation had the following capital structure: Common stock ($0.10 par value) …………………&acir
> The following account balances were selected from the records of Cascade Company at the end of the fiscal year after all adjusting entries were completed: Common stock ($0.01 par value; 200,000 shares authorized, 54,000 shares issued, 52,0
> Heather and Scott, two young financial analysts, were reviewing financial statements for Google, one of the world’s largest technology companies. Scott noted that the company did not report any dividends in the financing activity section of the statement
> Assume that you are on the board of directors of a company that has decided to buy 80 percent of the outstanding stock of another company within the next three or four months. The discussions have convinced you that this company is an excellent investmen
> Chicago Company reported the following information at the end of the current year: Common stock ($8 par value; 35,000 shares outstanding)……………â€
> 1. Explain how a stock dividend differs from a cash dividend. 2. Explain how a large stock dividend differs from a small stock dividend. 3. Explain how reselling treasury stock for more than it was purchased affects the income statement and the statement
> United Resources Company obtained a charter from the state in January of this year. The charter authorized 200,000 shares of common stock with a par value of $1. During the year, the company earned $590,000. Also during the year, the following selected t
> The following was in the financial press pertaining to GoDaddy Incorporated: April 1, 2015—GoDaddy’s (GDDY) stock was sold for $26 per share during its opening day of trading. GoDaddy sold 23 million shares at its IPO. Required: 1. Record the issuance o
> King Corporation began operations in January of the current year. The charter authorized the following stock: Preferred stock: 10 percent, $10 par value, 40,000 shares authorized Common stock: $5 par value, 85,000 shares authorized During the current yea
> Witt Corporation received its charter during January of this year. The charter authorized the following stock: Preferred stock: 10 percent, $10 par value, 21,000 shares authorized Common stock: $8 par value, 50,000 shares authorized During the year, the
> At the end of the year, the records of NCIS Corporation provided the following selected and incomplete data: Common stock ($10 par value); no changes in account during the year. Shares authorized: 200,000. Shares issued: _____ (all shares were issued at
> Assume for each of the following independent cases that the annual accounting period ends on December 31. Revenues for the year were $144,000. Expenses for the year were $164,000. Case A: Assume that the company is a sole proprietorship owned by Propriet
> To expand operations, Aragon Consulting issued 170,000 shares of previously unissued stock with a par value of $1. Investors purchased the stock for $21 per share. Record the sale of this stock. Would your journal entry be different if the par value was
> Carbide Corporation purchased 20,000 shares of its own stock from investors for $45 per share. The next year, the company resold 5,000 of the repurchased shares for $50 per share, and the following year it resold 10,000 of the repurchased shares for $37
> Refer to the financial statements of American Eagle Outfitters in Appendix B at the end of this book. Financial Statement of American Eagle Outfitters: Required: 1. What types of securities are included in the short-term investments and the long-term in
> Weili Corporation has 80,000 shares of common stock outstanding with a par value of $8. Required: 1. Complete the table below for each of the two following independent cases: Case 1: The board of directors declared and issued a 40 percent stock dividend
> On July 1, Davidson Corporation had the following capital structure: Common stock ($1 par value) …………………â
> At the beginning of the year, the stockholders’ equity section of the balance sheet of Solutions Corporation reflected the following: Common stock ($12 par value; 65,000 shares authorized, 30,000 shares outstanding)……………………. $360,0
> A recent annual report for Nordstrom Inc. disclosed that the company declared and paid dividends on common stock in the amount of $1.20 per share. During the year, Nordstrom had 1,000,000,000 authorized shares of common stock and 191,200,000 issued share
> Service Corporation has the following capital stock outstanding at the end of the current year: Preferred stock, 6 percent, $15 par value, 8,000 outstanding shares Common stock, $8 par value, 30,000 outstanding shares On October 1 of the current year, th
> The records of Hollywood Company reflected the following balances in the stockholders’ equity accounts at the end of the current year: Common stock, $12 par value, 50,000 shares outstanding Preferred stock, 10 percent, $10 par value, 5,000 shares outstan
> Peters and Associates is a small manufacturer of electronic connections for local area networks. Consider the three cases below as independent situations. Case 1: Peters increases its cash dividend by 50 percent, but no other changes occur in the company
> During the year, the following selected transactions affecting stockholders’ equity occurred for Navajo Corporation: Required: 1. Provide the journal entries to record each of the transactions in (a) through (c). 2. What impact does th
> During the year the following selected transactions affecting stockholders’ equity occurred for Orlando Corporation: Required: 1. Provide the journal entries to record each of the transactions in (a) through (c). 2. Describe the impact
> The following account balances were selected from the records of TAC Corporation at the end of the fiscal year after all adjusting entries were completed: Common stock ($20 par value; 100,000 shares authorized, 34,000 shares issued, 32,000 shares outsta
> Use the data given in Alternate Problem 5 for Summer Corporation. Data given in Alternate Problem 5: The comparative financial statements for Prince Company are below: Required: 1. Compute component percentages for Year 2. 2. Compute the ratios in the
> Rock Bottom Gold Company recently repurchased 7 million shares of its common stock for $47 per share. The intent of the repurchase was to increase earnings per share to be more in line with competitors. Required: 1. Determine the impact of the stock rep
> Procter & Gamble has sales in excess of $83 billion and sells products that are part of most of our daily lives, including Crest, Duracell, Olay, Gillette, Tide, and Vicks. A recent annual report for P&G contained the following information: a. Retained e
> On-Line Learning Corporation obtained a charter at the beginning of this year that authorized 52,000 shares of no-par common stock and 23,000 shares of preferred stock, par value $10. The corporation was organized by four individuals who purchased a tota
> Below is select information from DC United Company’s income statement. At the end of Year 1, the weighted average number of common shares outstanding was 132,000. Income Statement, End of Year 1 Sales ………………..…….………………………$942,000 Cost of goods sold.…
> Quick Fix-It Corporation was organized at the beginning of this year to operate several car repair businesses in a large metropolitan area. The charter issued by the state authorized the following stock: Common stock, $10 par value, 98,000 shares authori
> Ruth’s Chris Steakhouse is the largest upscale steakhouse company in the United States, based on total company- and franchisee-owned restaurants. The company’s menu features a broad selection of high quality USDA prime steaks and other premium offerings.
