Question: Tidewater Inc., a retailer, provided the following

> Briefly explain the difference between liquidity, solvency, and profitability analysis.

> The following data were taken from the financial statements of Hunter Inc. for December 31 of two recent years: The income before income tax was $480,000 and $420,000 for the current and previous years, respectively. a. Determine the ratio of liabiliti

> The dividend yield of Suburban Propane was 10.2% in a recent year, and the dividend yield of Google was 0% in the same year. What might explain the difference between these ratios?

> a. How does the return on total assets differ from the return on stockholders’ equity? b. Which ratio is normally higher? Why?

> What do the following data, taken from a comparative balance sheet, indicate about the company’s ability to borrow additional long-term debt in the current year as compared to the preceding year? Current Year Preceding Year $1,260,

> Forte Inc. produces and sells theater set designs and costumes. The company began operations on January 1, Year 1. The following transactions relate to securities acquired by Forte Inc., which has a fiscal year ending on December 31: Year 1 Jan. 22. Purc

> In teams, select a public company that interests you. Obtain the company’s most recent annual report on Form 10-K. The Form 10-K is a company’s annually required filing with the Securities and Exchange Commission (SEC). It includes the company’s financia

> Rodgers Industries Inc. completed its fiscal year on December 31. Near the end of the fiscal year, the company’s Internal Audit Department determined that an important internal control procedure had not been functioning properly. The head of Internal Aud

> a. Why is a high inventory turnover considered to be a positive indicator? b. Is it possible to have a high inventory turnover and a high number of days’ sales in inventory? Why?

> Marriott International, Inc., and Hyatt Hotels Corporation are two major owners and managers of lodging and resort properties in the United States. Abstracted income statement information for the two companies is as follows for a recent year (in millions

> Deere & Company manufactures and distributes farm and construction machinery that it sells around the world. In addition to its manufacturing operations, Deere’s credit division loans money to customers to finance the purchase of th

> The condensed income statements through income from operations for Amazon.com, Inc., Best Buy, Inc., and Wal-Mart Stores, Inc. for a recent fiscal year follow (in millions): 1. Prepare comparative common-sized income statements for each company. Round

> QT, Inc. and Elppa Computers, Inc. compete with each other in the personal computer market. QT assembles computers to customer orders, building and delivering a computer within four days of a customer entering an order online. Elppa, on the other hand, b

> The president of Freeman Industries Inc. made the following statement in the annual report to shareholders: “The founding family and majority shareholders of the company do not believe in using debt to finance future growth. The founding family learned f

> The financial statements for Nike, Inc., are presented in Appendix D at the end of the text. Use the following additional information (in thousands): Accounts receivable at May 31, 2014 ……………………. $ 3,117 Inventories at May 31, 2014 ………………………………….. 4,142

> International Financial Reporting Standard No. 16 provides companies the option of valuing property, plant, and equipment at either historical cost or fair value. If fair value is selected, then the property, plant, and equipment must be revalued periodi

> For 20Y2, Macklin Inc. reported a significant increase in net income. At the end of the year, John Mayer, the president, is presented with the following condensed comparative income statement: Instructions 1. Prepare a comparative income statement with

> Crosby Company has provided the following comparative information: You have been asked to evaluate the historical performance of the company over the last five years. Selected industry ratios have remained relatively steady at the following levels for

> The comparative financial statements of Stargel Inc. are as follows. The market price of Stargel common stock was $119.70 on December 31, 20Y2. Instructions Determine the following measures for 20Y2, rounding to one decimal place including percentages

> Data pertaining to the current position of Lucroy Industries Inc. follow: Cash ……………………â

> Lucas Hunter, president of Simmons Industries Inc., believes that reporting operating cash flow per share on the income statement would be a useful addition to the company’s just completed financial statements. The following discussion took place between

> For 20Y2, Fielder Industries Inc. initiated a sales promotion campaign that included the expenditure of an additional $40,000 for advertising. At the end of the year, Leif Grando, the president, is presented with the following condensed comparative incom

> The following data are taken from the financial statements of Sigmon Inc. Terms of all sales are 2/10, n/45. a. For 20Y2 and 20Y3, determine (1) The accounts receivable turnover and (2) The number of days’ sales in receivables. Round

> The following data were extracted from the income statement of Keever Inc.: a. Determine for each year (1) The inventory turnover and (2) The number of days’ sales in inventory. Round to the nearest dollar and one decimal place. b. Wh

> The bond indenture for the 10-year, 9% debenture bonds issued January 2, 20Y5, required working capital of $100,000, a current ratio of 1.5, and a quick ratio of 1.0 at the end of each calendar year until the bonds mature. At December 31, 20Y6, the three

> PepsiCo, Inc., the parent company of Frito-Lay snack foods and Pepsi beverages, had the following current assets and current liabilities at the end of two recent years: a. Determine the (1) Current ratio and (2) Quick ratio for both years. Round to one

> The following data were taken from the balance sheet of Nilo Company at the end of two recent fiscal years: a. Determine for each year (1) The working capital, (2) The current ratio, and (3) The quick ratio. Round ratios to one decimal place. b. What c

> Income statement data for Winthrop Company for two recent years ended December 31 are as follows: a. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease) for the current year when compared with the previou

> On July 16, 20Y1, Wyatt Corp. purchased 40 acres of land for $350,000. The land has been held for a future plant site until the current date, December 31, 20Y9. On December 18, 20Y9, TexoPete Inc. purchased 40 acres of land for $2,000,000 to be used for

> Balance sheet data for Alvarez Company on December 31, the end of two recent fiscal years, follow: Prepare a comparative balance sheet for both years, stating each asset as a percent of total assets and each liability and stockholdersâ€&#153

> Revenue and expense data for the current calendar year for Tannenhill Company and for the electronics industry are as follows. Tannenhill’s data are expressed in dollars. The electronics industry averages are expressed in percentages.

> The following comparative income statement (in thousands of dollars) for two recent fiscal years was adapted from the annual report of Speedway Motorsports, Inc., owner and operator of several major motor speedways, such as the Atlanta, Texas, and Las Ve

> This activity will require two teams to retrieve cash flow statement information from the Internet. One team is to obtain the most recent year’s statement of cash flows for Johnson & Johnson; the other team, the most recent year’s statement of cash flows

> Revenue and expense data for Innovation Quarter Inc. for two recent years are as follows: a. Prepare an income statement in comparative form, stating each item for both years as a percent of sales. Round to the nearest whole percentage. b. Comment on t

> Xavier Stores Company and Lestrade Stores Inc. are large retail department stores. Both companies offer credit to their customers through their own credit card operations. Information from the financial statements for both companies for two recent years

> Explain whether Colston Company correctly reported the following items in the financial statements: a. In a recent year, the company discovered a clerical error in the prior year’s accounting records. As a result, the reported net income for the previous

> Apex Inc. reports the following for a recent year: Income from continuing operations before income tax ……………… $1,000,000 Loss from discontinued operations …………………………………………… $240,000* Weighted average number of shares outstanding …………………………….. 20,000 Appl

> The net income reported on the income statement of Cutler Co. was $4,000,000. There were 500,000 shares of $10 par common stock and 100,000 shares of $2 preferred stock outstanding throughout the current year. The income statement included a gain on disc

> The table that follows shows the stock price, earnings per share, and dividends per share for three companies for a recent year: a. Determine the price-earnings ratio and dividend yield for the three companies. Round ratios and percentages to one decim

> The following information was taken from the financial statements of Tolbert Inc. for December 31 of the current fiscal year: Common stock, $20 par (no change during the year) ………………… $10,000,000 Preferred $4 stock, $40 par (no change during the year) ……

> The balance sheet for Garcon Inc. at the end of the current fiscal year indicated the following: Bonds payable, 8% ……………………………………… $5,000,000 Preferred $4 stock, $50 par …………………………… 2,500,000 Common stock, $10 par …………………………………. 5,000,000 Income before

> Berkshire Hathaway, the investment holding company of Warren Buffett, reports its “less than 20% ownership” investments according to generally accepted accounting principles. However, it also provides additional disclosures that it terms “look-through” e

> The following data were taken from the financial statements of Gates Inc. for the current fiscal year. Assuming that total assets were $7,000,000 at the beginning of the current fiscal year, determine the following: (a) Ratio of fixed assets to long-te

> Ralph Lauren Corporation sells apparel through company-owned retail stores. Recent financial information for Ralph Lauren follows (in thousands): Assume that the apparel industry average return on total assets is 8.0% and the average return on stockhol

> Dillip Lachgar is the president and majority shareholder of Argon Inc., a small retail chain store. Recently, Dillip submitted a loan application for Argon Inc. to Compound Bank. It called for a $600,000, 9%, 10-year loan to help finance the construction

> In groups of three or four, find the latest annual report for Microsoft Corporation. The annual report can be found on the company’s website at www.microsoft.com/msft/default.mspx. The notes to the financial statements include details of Microsoft’s inve

> A company’s current year net income (after income tax) is 25% larger than that of the preceding year. Does this indicate improved operating performance? Why or why not?

> You are considering an investment in a new start-up company, Giraffe Inc., an Internet service provider. A review of the company’s financial statements reveals a negative retained earnings. In addition, it appears as though the company has been running a

> Selected transactions completed by Equinox Products Inc. during the fiscal year ended December 31, Year 1, were as follows: a. Issued 15,000 shares of $20 par common stock at $30, receiving cash. b. Issued 4,000 shares of $80 par preferred 5% stock at $1

> In teams, select a public company that interests you. Obtain the company’s most recent annual report on Form 10-K. The Form 10-K is a company’s annually required filing with the Securities and Exchange Commission (SEC). It includes the company’s financia

> The comparative balance sheet of Harris Industries Inc. at December 31, 20Y4 and 20Y3, is as follows: An examination of the income statement and the accounting records revealed the following additional information applicable to 20Y4: a. Net income, $52

> The comparative balance sheet of Merrick Equipment Co. for December 31, 20Y9 and 20Y8, is as follows: Additional data obtained from an examination of the accounts in the ledger for 20Y9 are as follows: a. Equipment and land were acquired for cash. b. T

> The comparative balance sheet of Merrick Equipment Co. for Dec. 31, 20Y9 and 20Y8, is as follows: The income statement for the year ended December 31, 20Y9, is as follows: Additional data obtained from an examination of the accounts in the ledger for

> The comparative balance sheet of Martinez Inc. for December 31, 20Y4 and 20Y3, is as follows: The income statement for the year ended December 31, 20Y4, is as follows: Additional data obtained from an examination of the accounts in the ledger for 20Y

> The comparative balance sheet of Coulson, Inc. at December 31, 20Y2 and 20Y1, is as follows: The noncurrent asset, noncurrent liability, and stockholders’ equity accounts for 20Y2 are as follows: Instructions Prepare a statement of

> The comparative balance sheet of Whitman Co. at December 31, 20Y2 and 20Y1, is as follows: The noncurrent asset, noncurrent liability, and stockholders’ equity accounts for 20Y2 are as follows: Instructions Prepare a statement of ca

> The comparative balance sheet of Yellow Dog Enterprises Inc. at December 31, 20Y8 and 20Y7, is as follows: Additional data obtained from the income statement and from an examination of the accounts in the ledger for 20Y8 are as follows: a. Net income,

> The comparative balance sheet of Navaria Inc. for December 31, 20Y3 and 20Y2, is shown as follows: Additional data obtained from an examination of the accounts in the ledger for 20Y3 are as follows: a. The investments were sold for $175,000 cash. b. Eq

> Zeus Investments Inc. is a regional investment company that began operations on January 1, Year 1. The following transactions relate to trading securities acquired by Zeus Investments Inc., which has a fiscal year ending on December 31: Year 1 Feb. 14. P

> The comparative balance sheet of Navaria Inc. for December 31, 20Y3 and 20Y2, is as follows: The income statement for the year ended December 31, 20Y3, is as follows: Additional data obtained from an examination of the accounts in the ledger for 20Y3

> The comparative balance sheet of Canace Products Inc. for December 31, 20Y6 and 20Y5, is as follows: The income statement for the year ended December 31, 20Y6, is as follows: Additional data obtained from an examination of the accounts in the ledger

> On the basis of the details of the following fixed asset account, indicate the items to be reported on the statement of cash flows: ACCOUNT Land ACCOUNT NO. Balance Date Item Debit Credit Debit Credit Jan. Balance 156,000 Feb. 10 Purchased for cash

> On the basis of the following stockholders’ equity accounts, indicate the items, exclusive of net income, to be reported on the statement of cash flows. There were no unpaid dividends at either the beginning or the end of the year.

> On the basis of the details of the following fixed asset account, indicate the items to be reported on the statement of cash flows: ACCOUNT Land ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 868,000 972,300 Jan. 1 Balance Mar. 12 Purchased

> An analysis of the general ledger accounts indicates that delivery equipment, which cost $200,000 and on which accumulated depreciation totaled $60,000 on the date of sale, was sold for $132,500 during the year. Using this information, indicate the items

> An analysis of the general ledger accounts indicates that office equipment, which cost $202,500 and on which accumulated depreciation totaled $84,375 on the date of sale, was sold for $101,250 during the year. Using this information, indicate the items t

> The board of directors declared cash dividends totaling $585,000 during the current year. The comparative balance sheet indicates dividends payable of $167,625 at the beginning of the year and $146,250 at the end of the year. What was the amount of cash

> The income statement disclosed the following items for the year: Depreciation expense …………………………….. $ 65,000 Gain on disposal of equipment …………………… 27,500 Net income .……………………………………………. 620,000 The changes in the current asset and liability accounts for

> The net income reported on the income statement for the current year was $185,000. Depreciation recorded on equipment and a building amounted to $96,000 for the year. Balances of the current asset and current liability accounts at the beginning and end o

> Rekya Mart Inc. is a general merchandise retail company that began operations on January 1, Year 1. The following transactions relate to debt investments acquired by Rekya Mart Inc., which has a fiscal year ending on December 31: Year 1 Apr. 1. Purchased

> The net income reported on the income statement for the current year was $73,600. Depreciation recorded on store equipment for the year amounted to $27,400. Balances of the current asset and current liability accounts at the beginning and end of the year

> State the effect (cash receipt or payment and amount) of each of the following transactions, considered individually, on cash flows: a. Retired $400,000 of bonds, on which there was $3,000 of unamortized discount, for $411,000. b. Sold 20,000 shares of $

> On its income statement for a recent year, American Airlines Group, Inc., the parent company of American Airlines, reported a net loss of $1,834 million from operations. On its statement of cash flows, it reported $675 million of cash flows from operatin

> Lovato Motors Inc. has cash flows from operating activities of $720,000. Cash flows used for investments in property, plant, and equipment totaled $440,000, of which 85% of this investment was used to replace existing capacity. Determine the free cash fl

> The financial statements for Nike, Inc., are provided in Appendix C at the end of the text. a. Determine the free cash flow for the most recent fiscal year. Assume that 90% of the additions to property, plant, and equipment were used to maintain producti

> Sweeter Enterprises Inc. has cash flows from operating activities of $539,000. Cash flows used for investments in property, plant, and equipment totaled $210,000, of which 75% of this investment was used to replace existing capacity. a. Determine the fre

> The income statement for Rhino Company for the current year ended June 30 and balances of selected accounts at the beginning and the end of the year are as follows: Prepare the Cash flows from operating activities section of the statement of cash flows

> The income statement of Booker T Industries Inc. for the current year ended June 30 is as follows: Changes in the balances of selected accounts from the beginning to the end of the current year are as follows: _________________________________________I

> Selected data taken from the accounting records of Ginis Inc. for the current year ended December 31 are as follows: During the current year, the cost of merchandise sold was $1,031,550 and the operating expenses other than depreciation were $179,400.

> The cost of merchandise sold for Kohl’s Corporation for a recent year was $12,265 million. The balance sheet showed the following current account balances (in millions): Determine the amount of cash payments for merchandise. Balan

> Teasdale Inc. manufactures and sells commercial and residential security equipment. The comparative unclassified balance sheets for December 31, Year 2 and Year 1 are provided below. Selected missing balances are shown by letters. Note 1. Investments a

> The cash flows from operating activities are reported by the direct method on the statement of cash flows. Determine the following: a. If sales for the current year were $753,500 and accounts receivable decreased by $48,400 during the year, what was the

> The following statement of cash flows for Shasta Inc. was not correctly prepared: a. List the errors you find in the statement of cash flows. The cash balance at the beginning of the year was $240,000. All other amounts are correct, except the cash bal

> The comparative balance sheet of Olson-Jones Industries Inc. for December 31, 20Y2 and 20Y1, is as follows: The following additional information is taken from the records: 1. Land was sold for $120. 2. Equipment was acquired for cash. 3. There were no

> Selected data derived from the income statement and balance sheet of National Beverage Co. for a recent year are as follows: Income statement data (in thousands): Net income ……….…………………………………………………..………..……………… $49,311 Gain on disposal of property ………………

> Curwen Inc. reported net cash flow from operating activities of $357,500 on its statement of cash flows for a recent year ended December 31. The following information was reported in the Cash flows from operating activities section of the statement of ca

> On the basis of the details of the following bonds payable and related discount accounts, indicate the items to be reported in the financing activities section of the statement of cash flows, assuming no gain or loss on retiring the bonds: ACCOUNT B

> A long-term investment in bonds with a cost of $500,000 was sold for $600,000 cash. (a) What was the gain or loss on the sale? (b) What was the effect of the transaction on cash flows? (c) How would the transaction be reported on the statement of cash fl

> If salaries payable was $100,000 at the beginning of the year and $75,000 at the end of the year, should the $25,000 decrease be added to or deducted from income to determine the amount of cash flows from operating activities by the indirect method? Expl

> What is the principal advantage and the principal disadvantage of the direct method of reporting cash flows from operating activities?

> Financial assets include stocks and bonds. These are fairly simple securities that can often be valued using quoted market prices. However, there are more complex financial instruments that do not have quoted market prices. These complex securities must

> Glacier Products Inc. is a wholesaler of rock climbing gear. The company began operations on January 1, Year 1. The following transactions relate to securities acquired by Glacier Products Inc., which has a fiscal year ending on December 31: Year 1 Jan.

> On January 6, Year 1, Bulldog Co. purchased 34% of the outstanding stock of Gator Co. for $212,000. Gator Co. paid total dividends of $24,000 to all shareholders on June 30. Gator had a net loss of $56,000 for Year 1. a. Journalize Bulldog’s purchase of

> On January 4, Year 1, Ferguson Company purchased 480,000 shares of Silva Company directly from one of the founders for a price of $30 per share. Silva has 1,200,000 shares outstanding, including the Daniels shares. On July 2, Year 1, Silva paid $750,000

> At a total cost of $5,600,000, Herrera Corporation acquired 280,000 shares of Tran Corp. common stock as a long-term investment. Herrera Corporation uses the equity method of accounting for this investment. Tran Corp. has 800,000 shares of common stock o

> Seamus Industries Inc. buys and sells investments as part of its ongoing cash management. The following investment transactions were completed during the year: Feb. 24. Acquired 1,000 shares of Tett Co. stock for $85 per share plus a $150 brokerage commi

> Yerbury Corp. manufactures construction equipment. Journalize the entries to record the following selected equity investment transactions completed by Yerbury during a recent year: Feb. 2. Purchased for cash 5,300 shares of Wong Inc. stock for $20 per sh

> The following equity investment transactions were completed by Romero Company during a recent year: Apr. 10. Purchased 5,000 shares of Dixon Company for a price of $25 per share plus a brokerage commission of $75. July 8. Received a quarterly dividend of

> On February 22, Stewart Corporation acquired 12,000 shares of the 400,000 outstanding shares of Edwards Co. common stock at $50 plus commission charges of $120. On June 1, a cash dividend of $1.40 per share was received. On November 12, 4,000 shares were

> On February 1, Hansen Company purchased $120,000 of 5%, 20-year Knight Company bonds at their face amount plus one month’s accrued interest. The bonds pay interest on January 1 and July 1. On October 1, Hansen Company sold $40,000 of the Knight Company b