Question 1 - Use the following data to calculate the liquidity and profitability ratios listed below.
Average common shares 10,000 Current liabilities $100,000
Capital expenditures $20,000 Net income $ 21,000
Cash provided by operations $28,000 Net sales $150,000
Dividends paid $5,000 Total liabilities $105,000
Current assets $150,000 Total assets $175,000
Instructions: Compute the following:
(a) Current ratio.
(b) Working capital.
(c) Earnings per share.
(d) Debt to total assets ratio.
(e) Free Cash Flow
To earn full credit, you must state the formula you are using, show your computations and explain your findings.
Question 2 - The following items are taken from the financial statements of Tracy Company for 2010:
Accounts Payable $ 15,000
Accounts Receivable 11,000
Accumulated Depreciation-Video Equipment 28,000
Advertising Expense 21,000
Cash 24,000
Common Stock 90,000
Depreciation Expense 12,000
Dividends 15,000
Insurance Expense 3,000
Note Payable (due 2013) 70,000
Prepaid Insurance 6,000
Rent Expense 17,000
Retained Earnings (beginning) 12,000
Salaries Expense 34,000
Salaries Payable 3,000
Service Revenue 145,000
Supplies 4,000
Supplies Expense 6,000
Video Equipment 210,000
Instructions
(a) Calculate the net income.
(b) Calculate the balance of Retained Earnings that would appear on a balance sheet at December 31, 2010.
Question 3 - Bentley Company reported net income of $320,000 for the current year. Depreciation recorded on buildings and equipment amounted to $75,000 for the year. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows:
End of Year Beginning of Year
Cash $22,000 $15,000
Accounts receivable 17,000 32,000
Inventories 55,000 65,000
Prepaid expenses 7,500 5,000
Accounts payable 14,000 18,000
Income taxes payable 600 1,200
Instructions - Prepare the cash flows from the operating activities section of the statement of cash flows using the indirect method.
Question 4 - The following items are taken from the financial statements of Tracy Company for 2010:
Accounts Payable $ 15,000
Accounts Receivable 11,000
Accumulated Depreciation-Video Equipment 28,000
Advertising Expense 21,000
Cash 24,000
Common Stock 90,000
Depreciation Expense 12,000
Dividends 15,000
Insurance Expense 3,000
Note Payable (due 2013) 70,000
Prepaid Insurance 6,000
Rent Expense 17,000
Retained Earnings (beginning) 12,000
Salaries Expense 34,000
Salaries Payable 3,000
Service Revenue 145,000
Supplies 4,000
Supplies Expense 6,000
Video Equipment 210,000
Instructions
(a) Calculate the net income.
(b) Calculate the balance of Retained Earnings that would appear on a balance sheet at December 31, 2010.
Question 5 - Bentley Company reported net income of $320,000 for the current year. Depreciation recorded on buildings and equipment amounted to $75,000 for the year. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows:
End of Year Beginning of Year
Cash $22,000 $15,000
Accounts receivable 17,000 32,000
Inventories 55,000 65,000
Prepaid expenses 7,500 5,000
Accounts payable 14,000 18,000
Income taxes payable 600 1,200
Instructions - Prepare the cash flows from the operating activities section of the statement of cash flows using the indirect method.