Question: The comparative financial statements for Prince

> 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&#1

> 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.

> Williamson Corporation was organized to operate a tax preparation business. The charter authorized the following stock: common stock, $2 par value, 80,000 shares authorized. During the first year, the following selected transactions were completed: a. So

> The stockholders’ equity section on the balance sheet of Dillard’s, a popular department store, is shown below. During the year, the company reported net income of $463,909,000 and declared and paid dividends of $10,00

> Tarrant Corporation was organized this year to operate a financial consulting business. The charter authorized the following stock: common stock, par value $10 per share, 11,500 shares authorized. During the year, the following selected transactions were

> The financial statements for Highland Corporation included the following selected information: Common stock ……………………………………..$1,600,000 Retained earnings …………………………………..$900,000 Net income……………………………………………$1,000,000 Shares issued………………………………………………90,000 S

> The comparative financial statements for Summer Corporation are below: Required: 1. Complete the following columns for each item in the preceding comparative financial statements: INCREASE (DECREASE) from Year 1 to Year 2 Amount Percent 2. By what am

> Tandy Company was issued a charter by the state of Indiana on January 15 of this year. The charter authorized the following: Common stock, $10 par value, 103,000 shares authorized Preferred stock, 9 percent, par value $8 per share, 4,000 shares authorize

> Case 1: Matsumoto Training Academies is a sole proprietorship. To start the business, the owner, Mr. Tanaka, contributed $500,000 cash. During the year the owner withdrew $30,000 cash. Net income for the year was $45,000. Case 2: Galaxy Robotics is a par

> Pool Corporation, Inc., is the world’s largest wholesale distributor of swimming pool supplies and equipment. It is a publicly traded corporation that trades on the NASDAQ exchange under the symbol POOL. The majority of Pool’s customers are small, famil

> Answer the questions below. Treat each case as being independent from the other cases. Case A: The charter for Rogers, Incorporated, authorized the following stock: Common stock, $10 par value, 103,000 shares authorized Preferred stock, 9 percent, $8 par

> Evaluating an Ethical Dilemma You are a member of the board of directors of a large company that has been in business for more than 100 years. The company is proud of the fact that it has paid dividends every year it has been in business. Because of this

> Refer to the financial statements of American Eagle Outfitters in Appendix B and Urban Outfitters in Appendix C. Financial statements of American Eagle: Financial statements of Urban Outfitters: Required: 1. Calculate the dividend yield ratios for Urba

> Refer to the financial statements of Urban Outfitters in Appendix C at the end of this book Financial statements of Urban Outfitters: Required: 1. How many shares of common stock are authorized? How many are issued? How many are outstanding? 2. Did the

> 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. Does the company report treasury stock? If so, what dollar amount does it report? 2. Did

> Granderson Company was granted a charter on January 1 that authorized the following stock: Common stock: $40 par value, 100,000 shares authorized Preferred stock: 8 percent; $5 par value; 20,000 shares authorized During the year, the following transactio

> At the end of the year, the records of Duo Corporation provided the following selected and incomplete data: Common stock: $1,500,000 ($1 par value; no changes in account during the year). Shares authorized: 5,000,000. Shares issued: _____ (all shares wer

> Tabor Company has just prepared the following comparative annual financial statements for the current year: Required: 1. For the current year, compute the turnover, liquidity, and solvency ratios in Exhibit 13.3. Assume cash flows from operating activit

> Carlton Company reported the following information at the end of the year: Common stock ($1 par value; 500,000 shares outstanding) ……………â€&brvb

> Under the equity method, dividends received from the affiliate company are not recorded as revenue. To record dividends as revenue involves double counting. Explain.

> Under the equity method, why does the investor company measure revenue on a proportionate basis when income is reported by the affiliate company rather than when dividends are declared?

> Explain the application of the cost principle to the purchase of capital stock in another company.

> Explain the difference in accounting methods used for passive investments, investments in which the investor can exert significant influence, and investments in which the investor has control over another entity.

> Explain the difference between a short-term investment and a long-term investment.

> What is goodwill?

> Company A uses the FIFO method to account for inventory and Company B uses the LIFO method. The two companies are exactly alike except for the difference in inventory cost flow assumptions. Costs of inventory items for both companies have been rising ste

> Use the data in Problem 5 for Prince Company. Assume that the stock price per share is $28 and that dividends in the amount of $3.50 per share were paid during Year 2. Compute the following ratios: · Earnings per share · Current ratio

> Use the data given in Problem 5 for Prince Company. Data from 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 DuPont model for Year 2.

> Using the financial information presented in Exhibit 13.1, calculate the following ratios for The Home Depot: · Net profit margin · Earnings quality · Receivable turnover · Cash ratio Â&middot

> The current year financial statements for Blue Water Company and Prime Fish Company are presented below. Both companies are in the fish catching and manufacturing business. Both have been in business approximately 10 years, and each has had steady growth

> Using the financial information presented in Exhibit 13.1, calculate the following ratios for The Home Depot: · Return on equity · Return on assets · Total asset turnover · Inventory turnover · Current ratio · Quick ratio · Cash coverage ratio · Debt-to-

> You have the opportunity to invest $10,000 in one of two companies from a single industry. The only information you have is below. Which company would you select? Justify your choice. Ratios for Current Year Company A Company B Industry Average Curre

> Company X and Company Y are two giants of the retail industry. Both offer full lines of moderately priced merchandise. In the last fiscal year, annual sales for Company X totaled $53 billion and annual sales for Company Y totaled $20 billion. Compare the

> What is ratio analysis? Why is it useful?

> What are the two general methods for making financial comparisons?

> How does product differentiation differ from cost differentiation?

> When considering an investment in stock, investors should evaluate the company’s future income and growth potential on the basis of what three factors?

> Who are the primary users of financial statements?

> 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 manufacturer reported an inventory turnover ratio of 8.6 during last year. This year, management introduced a new inventory control system that was expected to reduce average inventory levels by 25 percent without affecting sales. Given this estimate,

> A creditor is least likely to use what ratio when analyzing a company that has borrowed funds on a long-term basis? a. Cash coverage ratio. b. Debt-to-equity ratio. c. Times interest earned ratio. d. Dividend yield ratio.

> California Pizza Kitchen opened its first restaurant in Beverly Hills in 1985. Almost immediately after the first location opened, it expanded from California to more than 250 locations in more than 30 states and 11 countries. California Pizza Kitchen co

> A decrease in selling and administrative expenses would impact what ratio? a. Fixed asset turnover ratio. b. Times interest earned ratio. c. Debt-to-equity ratio. d. Current ratio.

> Given the following ratios for four companies, which company is least likely to experience problems paying its current liabilities promptly? Receivable Quick Ratio Turnover Ratio а. 1.2 58 b. 1.2 25 с. 1.0 55 d. .5 60

> The inventory turnover ratio for Natural Foods Stores is 14.6. The company reported cost of goods sold in the amount of $1,500,000 and total sales of $2,500,000. What is the average amount of inventory for Natural Foods? a. $102,740 c. $100,000 b. $

> A company has quick assets of $300,000 and current liabilities of $150,000. The company purchased $50,000 in inventory on credit. After the purchase, the quick ratio would be a. 2.0 c. 1.5 b. 2.3 d. 1.75

> Positive financial leverage indicates a. Positive cash flow from financing activities. b. A debt-to-equity ratio higher than 1. c. A rate of return on assets exceeding the interest rate on debt. d. A profit margin in one year exceeding the previous year’

> Positive financial leverage indicates a. Positive cash flow from financing activities. b. A debt-to-equity ratio higher than 1. c. A rate of return on assets exceeding the interest rate on debt. d. A profit margin in one year exceeding the previous year’

> Which of the following ratios is used to analyze liquidity? a. Earnings per share. c. Current ratio. b. Debt-to-equity ratio. d. Both (a) and (c).

> Which of the following would not change the receivables turnover ratio for a retail company? a. Increases in the retail prices of inventory. b. A change in credit policy. c. Increases in the cost incurred to purchase inventory. d. None of the above.

> A company has total assets of $500,000 and noncurrent assets of $400,000. Current liabilities are $40,000. What is the current ratio? a. 12.5 b. 10.0 c. 2.5 d. Cannot be determined without additional information.

> You have the opportunity to invest $10,000 in one of two companies from a single industry. The only information you have is below. Which company would you select? Justify your choice. Industry Average Ratios for Current Year Company A Company B Curre

> James Company purchased $800,000, 8 percent bonds issued by Heidi Company on January 1 of the current year. The purchase price of the bonds was $900,000. Interest is payable semiannually each June 30 and December 31. Record the purchase of the bonds on J

> What are the typical cash inflows from financing activities? What are the typical cash outflows from financing activities?

> What are the typical cash inflows from investing activities? What are the typical cash outflows from investing activities?

> Under the indirect method, depreciation expense is added to net income to report cash flows from operating activities. Does depreciation cause an inflow of cash?

> What are the typical cash inflows from operating activities? What are the typical cash outflows from operating activities?

> Which of the following transactions qualify as noncash investing and financing activities? _____ Purchase of building with mortgage payable. _____ Additional short-term borrowing from bank. _____ Dividends paid in cash. _____ Purchase of equipment with s

> Telstra, Australia’s largest telecommunications and media company, has net revenue of more than $26 billion (Australian). Some of the items included in its recent annual consolidated statement of cash flows presented using the direct method are listed he

> Indicate whether each item would be added (+) or subtracted (−) in the computation of cash flow from operating activities using the indirect method. _____ 1. Accrued expenses (increase). _____ 2. Inventories (increase). _____ 3. Accounts receivable (decr

> MillerCoors Brewing Company is the world’s fifth largest brewer. In the United States, its tie to the magical appeal of the Rocky Mountains is one of its most powerful trademarks. Some of the items included in its recent annual consolidated statement of

> The total change in cash as shown near the bottom of the statement of cash flows for the year should agree with which of the following? a. The difference in retained earnings when reviewing the comparative balance sheet. b. Net income or net loss as foun

> Consider the following: Issued common stock for $18,000, sold office equipment for $1,200, paid cash dividends of $4,000, purchased investments for $2,000, purchased new equipment for $4,000. What was the net cash inflow (outflow) from investing activiti

> During December of the current year, James Company acquired some of the 50,000 outstanding shares of the common stock, par $12, of Andrew Corporation as available-for-sale investments. The accounting period for both companies ends December 31. Give the j

> Consider the following: Issued common stock for $18,000, sold office equipment for $1,200, paid cash dividends of $4,000, purchased investments for $2,000, paid accounts payable of $4,000. What was the net cash inflow (outflow) from financing activities?

> Which of the following is not added to net income when computing cash flows from operations under the indirect method? a. The net increase in accounts payable. b. The net decrease in accounts receivable. c. Depreciation expense reported on the income sta

> Which of the following items would not appear in the financing section of the statement of cash flows? a. The repurchase of the company’s own stock. b. The receipt of dividends. c. The repayment of debt. d. The payment of dividends.

> Which of the following would not appear in the investing section of the statement of cash flows? a. Purchase of inventory. b. Sale of obsolete equipment used in the factory. c. Purchase of land for a new office building. d. All of the above would appear

> Consider the following: Net income = $10,000, depreciation expense = $2,000, accounts receivable increased by $800, inventory decreased by $100, and accounts payable increased by $500. Based on this information alone, what is cash flow from operating act

> If the balance in prepaid expenses has increased during the year, what action should be taken on the statement of cash flows when following the indirect method, and why? a. The change in the account balance should be subtracted from net income because th

> Total cash inflow in the operating section of the statement of cash flows should include which of the following? a. Cash received from customers at the point of sale. b. Cash collections from customer accounts receivable. c. Cash received in advance of r

> In what order do the three sections of the statement of cash flows usually appear when reading from top to bottom? a. Financing, Investing, Operating c. Operating, Financing, Investing b. Investing, Operating, Financing d. Operating, Investing, Fin

> Your parents have just retired and have asked you for some financial advice. They have decided to invest $100,000 in a company very similar to Whole Foods. The company has issued both common and preferred stock. Describe the differences between common st

> Conceptually, does a 2-for-1 stock dividend immediately increase an investor’s personal wealth? a. No, because the stock price per share drops by half when the number of shares doubles. b. Yes, because the investor has more shares. c. Yes, because the in

> Dollar General Corporation operates general merchandise stores that feature quality merchandise at low prices. All stores are located in the United States, predominantly in small towns in 24 mid western and southeastern states. In the current year, the c

> When treasury stock is purchased with cash, what is the impact on the balance sheet equation? a. No change: The reduction of the asset cash is offset with the addition of the asset treasury stock. b. Assets decrease and stockholders’ equity increases. c.

> Which statement regarding dividends is false? a. Dividends represent a distribution of corporate profits to owners. b. Both stock and cash dividends reduce retained earnings. c. Cash dividends paid to stockholders reduce net income. d. None of the above

> A company has net income of $225,000 and declares and pays dividends in the amount of $75,000. What is the net impact on retained earnings? a. Increase of $225,000 c. Increase of $150,000 b. Decrease of $75,000 d. Decrease of $150,000

> Which of the following dates does not require a journal entry? a. Date of declaration. c. Date of payment. b. Date of record. d. A journal entry is recorded on all of these dates.

> A company issued 100,000 shares of common stock with a par value of $1 per share. The stock sold for $20 per share. By what amount will stockholders’ equity increase? a. $100,000 c. $2,000