Accounting Week 10 Exercise 14-3, 14-4 and 14-6A Solution done june 2015

| October 3, 2018

Exercise 14-3The comparative condensed balance sheets of Garcia Corporation are presented below.GARCIA CORPORATIONComparative Condensed Balance SheetsDecember 3120142013AssetsCurrent assets$ 76,000$ 80,000Property, plant, and equipment (net)100,00090,000Intangibles24,00040,000Total assets$200,000$210,000Liabilities and stockholders’ equityCurrent liabilities$ 40,000$ 48,000Long-term liabilities140,000150,000Stockholders’ equity20,00012,000Total liabilities and stockholders’ equity$200,000$210,000(a) Prepare a horizontal analysis of the balance sheet data for Garcia Corporation using 2013 as a base.(If amount and percentage are a decrease show the numbers as negative, e.g. -55,000, -20% or (55,000). (20%). Round percentages to 1 decimal place, e.g. 12.3%.)GARCIA CORPORATIONCondensed Balance SheetsDecember 3120142013Increase(Decrease)PercentageChange from 2013AssetsCurrent Assets$76,000$80,000$%Property, Plant & Equipment (net)100,00090,000%Intangibles24,00040,000%Total assets$200,000$210,000$%Liabilities and Stockholders’ EquityCurrent Liabilities$40,000$48,000$%Long-term Liabilities140,000150,000%Stockholders’ Equity20,00012,000%Total liabilities and stockholders’ equity$200,000$210,000$%(b) Prepare a vertical analysis of the balance sheet data for Garcia Corporation in columnar form for 2014.(Round percentages to 0 decimal places, e.g. 12%.)GARCIA CORPORATIONCondensed Balance SheetDecember 31, 2014AmountPercentAssetsCurrent Assets$76,000%Property, Plant, and Equipment (net)100,000%Intangibles24,000%Total assets$200,000%Liabilities and Stockholders’ EquityCurrent Liabilities$40,000%Long-term Liabilities140,000%Stockholders’ Equity20,000%Total liabilities and stockholders’ equity$200,000%WarningDon’t show me this message again for the assignment.wiley.com/edugen/shared/assignment/test/qview.uni?id=quest2096801entrance1&selected_question=quest2096801&operation=take-question”>Ok.wiley.com/edugen/shared/assignment/test/qview.uni?id=quest2096801entrance1&selected_question=quest2096801&operation=take-question”>CancelClick if you would like to Show Work for this question:Open Show WorkExercise 14-4The comparative condensed income statements of Hendi Corporation are shown below.HENDI CORPORATIONComparative Condensed Income StatementsFor the Years Ended December 3120142013Net sales$600,000$500,000Cost of goods sold468,000400,000Gross profit132,000100,000Operating expenses60,00054,000Net income$ 72,000$ 46,000(a) Prepare a horizontal analysis of the income statement data for Hendi Corporation using 2013 as a base. (Show the amounts of increase or decrease.)(If amount and percentage are a decrease show the numbers as negative, e.g. -55,000, -20% or (55,000). (20%). Round percentages to 1 decimal place, e.g. 12.3%.)HENDI CORPORATIONCondensed Income StatementsFor the Years Ended December 31Increase or (Decrease)During 201320142013AmountPercentageNet sales$600,000$500,000$%Cost of goods sold468,000400,000%Gross profit132,000100,000%Operating expenses60,00054,000%Net income$72,000$46,000$%(b) Prepare a vertical analysis of the income statement data for Hendi Corporation in columnar form for both years.(Round percentages to 1 decimal place, e.g. 12.3%.)HENDI CORPORATIONCondensed Income StatementsFor the Years Ended December 3120142013AmountPercentAmountPercentNet sales$600,000%$500,000%Cost of goods sold468,000%400,000%Gross profit132,000%100,000%Operating expenses60,000%54,000%Net income$ 72,000%$ 46,000%WarningDon’t show me this message again for the assignment.wiley.com/edugen/shared/assignment/test/qview.uni?id=quest2096802entrance1&selected_question=quest2096802&operation=take-question”>Ok.wiley.com/edugen/shared/assignment/test/qview.uni?id=quest2096802entrance1&selected_question=quest2096802&operation=take-question”>CancelClick if you would like to Show Work for this question:Open Show WorkExercise 14-13Maulder Corporation has income from continuing operations of $290,000 for the year ended December 31, 2014. It also has the following items (before considering income taxes).1.An extraordinary loss of $70,000.2.A gain of $35,000 on the discontinuance of a division.3.A correction of an error in last year’s financial statements that resulted in a $25,000 understatement of 2013 net income.Assume all items are subject to income taxes at a 30% tax rate.Prepare an income statement, beginning with income from continuing operations.MAULDER CORPORATIONPartial Income StatementFor the Year Ended December 31, 2014 Discontinued OperationsDividendsExpensesExtraordinary ItemExtraordinary LossGain on Discontinued DivisionIncome Before Extraordinary ItemIncome Before Income TaxesIncome From Continuing OperationsIncome Tax ExpenseLoss from Operations of Music DivisionNet Income / (Loss)Retained EarningsTotal ExpensesTotal Revenues$ Discontinued OperationsDividendsExpensesExtraordinary ItemExtraordinary LossGain on Discontinued DivisionIncome Before Extraordinary ItemIncome Before Income TaxesIncome From Continuing OperationsIncome Tax ExpenseLoss from Operations of Music DivisionNet Income / (Loss)Retained EarningsTotal ExpensesTotal Revenues Discontinued OperationsDividendsExpensesExtraordinary ItemExtraordinary LossGain on Discontinued DivisionIncome Before Extraordinary ItemIncome Before Income TaxesIncome From Continuing OperationsIncome Tax ExpenseLoss from Operations of Music DivisionNet Income / (Loss)Retained EarningsTotal ExpensesTotal Revenues Discontinued OperationsDividendsExpensesExtraordinary ItemExtraordinary LossGain on Discontinued DivisionIncome Before Extraordinary ItemIncome Before Income TaxesIncome From Continuing OperationsIncome Tax ExpenseLoss from Operations of Music DivisionNet Income / (Loss)Retained EarningsTotal ExpensesTotal Revenues Discontinued OperationsDividendsExpensesExtraordinary ItemExtraordinary LossGain on Discontinued DivisionIncome Before Extraordinary ItemIncome Before Income TaxesIncome From Continuing OperationsIncome Tax ExpenseLoss from Operations of Music DivisionNet Income / (Loss)Retained EarningsTotal ExpensesTotal Revenues Discontinued OperationsDividendsExpensesExtraordinary ItemExtraordinary LossGain on Discontinued DivisionIncome Before Extraordinary ItemIncome Before Income TaxesIncome From Continuing OperationsIncome Tax ExpenseLoss from Operations of Music DivisionNet Income / (Loss)Retained EarningsTotal ExpensesTotal Revenues Discontinued OperationsDividendsExpensesExtraordinary ItemExtraordinary LossGain on Discontinued DivisionIncome Before Extraordinary ItemIncome Before Income TaxesIncome From Continuing OperationsIncome Tax ExpenseLoss from Operations of Music DivisionNet Income / (Loss)Retained EarningsTotal ExpensesTotal Revenues$WarningDon’t show me this message again for the assignment.wiley.com/edugen/shared/assignment/test/qview.uni?id=quest2096813entrance1&selected_question=quest2096813&operation=take-question”>Ok.wiley.com/edugen/shared/assignment/test/qview.uni?id=quest2096813entrance1&selected_question=quest2096813&operation=take-question”>CancelClick if you would like to Show Work for this question:Open Show WorkProblem 14-6AThe comparative statements of Beulah Company are presented below.BEULAH COMPANYIncome StatementFor the Years Ended December 3120142013Net sales (all on account)$500,000$420,000ExpensesCost of goods sold315,000254,000Selling and administrative120,800114,800Interest expense7,5006,500Income tax expense20,00015,000Total expenses463,300390,300Net income$ 36,700$ 29,700BEULAH COMPANYBalance SheetsDecember 31Assets20142013Current assetsCash$ 21,000$ 18,000Short-term investments18,00015,000Accounts receivable (net)85,00075,000Inventory80,00060,000Total current assets204,000168,000Plant assets (net)423,000383,000Total assets$627,000$551,000Liabilities and Stockholders’ EquityCurrent liabilitiesAccounts payable$122,000$110,000Income taxes payable12,00011,000Total current liabilities134,000121,000Long-term liabilitiesBonds payable120,00080,000Total liabilities254,000201,000Stockholders’ equityCommon stock ($5 par)150,000150,000Retained earnings223,000200,000Total stockholders’ equity373,000350,000Total liabilities and stockholders’ equity$627,000$551,000Additional data:The common stock recently sold at $19.50 per share.Compute the following ratios for 2014.(Round Earnings per share and Acid-test ratio to 2 decimal places, e.g. 1.65, and all others to 1 decimal place, e.g. 6.8 or 6.8% .)(a)Current ratio:1(b)Acid-test ratio:1(c)Accounts receivable turnovertimes(d)Inventory turnovertimes(e)Profit margin%(f)Asset turnovertimes(g)Return on assets%(h)Return on common stockholders’ equity%(i)Earnings per share$(j)Price-earnings ratiotimes(k)Payout ratio%(l)Debt to total assets%(m)Times interest earnedtimesWarningDon’t show me this message again for the assignment.wiley.com/edugen/shared/assignment/test/qview.uni?id=quest2096823entrance1&selected_question=quest2096823&operation=take-question”>Ok.wiley.com/edugen/shared/assignment/test/qview.uni?id=quest2096823entrance1&selected_question=quest2096823&operation=take-question”>CancelClick if you would like to Show Work for this question:

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