This is a comprehensive problem all contained on this spreadsheet tab. You are to prepare a cash flow statement, a vertical analysis, a horizontal analysis, and some ratio calculations. Scroll down the spreadsheet to complete each part.
Philadelphia Widget Corporation is in the process of preparing financial statements for the year ended 12/31/2015.
They have completed the balance sheet and income statement as shown.
| Philadelphia Widget CorporationIncome StatementFor the year ended 12/31/2015 |
| Revenue |
|
1,235,000 |
| Cost of Goods Sold |
|
806,656 |
| Gross Profit |
|
428,344 |
| Administrative Expenses: |
|
|
| Salaries |
212,450 |
|
| Rent |
82,500 |
|
| Depreciation |
24,800 |
|
| Total Administrative Expense |
|
319,750 |
| Operating Profit |
|
108,594 |
| Gain on Sale of Equipment |
|
4,500 |
| Interest Expense |
|
-42,115 |
| Net Income |
|
70,979 |
| Philadelphia Widget Corporation Balance Sheet As of 12/31/2015, 12/31/2014, and 12/31/2013 |
|
2015 |
2014 |
2013 |
| Cash |
|
119,411 |
|
89,564 |
|
105,644 |
| Accounts Receivable |
|
85,455 |
|
83,118 |
|
78,400 |
| Inventory |
|
41,300 |
|
48,560 |
|
62,600 |
| Prepaid Expenses |
|
14,500 |
|
18,100 |
|
24,000 |
| Total Current Assets |
|
260,666 |
|
239,342 |
|
270,644 |
| Land |
|
50,000 |
|
50,000 |
|
50,000 |
| Buildings and Equipment |
182,450 |
|
172,450 |
|
166,800 |
|
| Accumulated Depreciation |
78,900 |
103,550 |
62,600 |
109,850 |
54,580 |
112,220 |
| Total Assets |
|
414,216 |
|
399,192 |
|
432,864 |
| Accounts Payable |
|
62,525 |
|
51,480 |
|
45,200 |
| Wages payable |
|
4,500 |
|
4,500 |
|
1,500 |
| Unearned Revenue |
|
3,000 |
|
- |
|
- |
| Current Portion of Long-Term Debt |
|
50,000 |
|
50,000 |
|
50,000 |
| Total Current Liabilities |
|
120,025 |
|
105,980 |
|
96,700 |
| Long-Term Debt |
|
175,000 |
|
225,000 |
|
275,000 |
| Common Stock, 3500 shares outstanding |
35,000 |
|
35,000 |
|
35,000 |
|
| Retained Earnings |
84,191 |
|
33,212 |
|
26,164 |
|
| Total Stockholders' Equity |
|
119,191 |
|
68,212 |
|
61,164 |
A. Prepare a Statement of Cash Flow using the indirect method for 2015 using the above statements and the following additional information:
1. Equipment costing $30,000 was purchased in 2015.
2. Equipment having an original cost of $20,000 and accumulated depreciation of $8,500 was sold for $16,000 during 2015.
3. A dividend of $20,000 was declared and paid in 2015.
B. Prepare a vertical analysis (1 year) of the income statement above and a horizontal analysis (2 years) of the balance sheet.
C. Calculate the following ratios based on 12/31/2015 numbers:
1. Earnings per share
2. Return on common stockholder's equity
3. Return on assets
4. Current ratio
5. Acid-test ratio
6. Accounts receivable turnover.
Attachment:- Assignment.rar