FINAL EXAM: ACC/400 K. Smith The condensed financial statements

| September 29, 2018

FINAL EXAM: ACC/400
K. Smith

The
condensed financial statements of Westward Corporation for 2009 and 2008 are
presented below.

Westward Corporation Westward
Corporation
Balance Sheet Income
Statement
December 31, 2009 For
the Year Ended December 31, 2009

Assets Revenues $2,000,000
Current assets Expenses
Cash and temporary Cost
of goods sold 1,080,000
investments $ 30,000 Selling
and administrative
Accounts receivable 70,000 expenses 495,000
Inventories 120,000 Interest expense 30,000
Total current assets 220,000 Total expenses
1,605,000
Property, plant, and Income
before income taxes 395,000
equipment (net) 780,000 Income tax expense
140,000
Total assets $1,000,000 Net income $ 255,000

Liabilities and
Stockholders’ Equity
Current liabilities $ 80,000
Long-term liabilities 300,000
Common stockholders’ equity 620,000
Total liabilities and
stockholders’ equity $1,000,000

Westward Corporation Westward
Corporation
Balance Sheet Income
Statement
December 31, 2008 For the Year Ended December
31, 2008

Assets Revenues $2,500,000
Current assets Expenses
Cash and temporary Cost
of goods sold 1,750,000
investments $ 40,000 Selling
and administrative
Accounts receivable 90,000 expenses 500,000
Inventories 150,000 Interest expense 30,000
Total current assets 280,000 Total expenses
2,280,000
Property, plant, and Income
before income taxes 220,000
equipment (net) 800,000 Income tax expense
77,000
Total assets $1,080,000 Net income $ 143,000

Liabilities and
Stockholders’ Equity
Current liabilities $ 140,000
Long-term liabilities 320,000
Common stockholders’ equity 620,000
Total liabilities and
stockholders’ equity $1,080,000

Select data from fiscal
year 2007:

Inventory: $100,000
Total assets: $900,000
Stockholders’ Equity: $540,000

Instructions

Compute the following listed ratios for 2009 and
2008 showing supporting calculations. (5.2 points)

Current ratio
Debt to total Assets
Times interest earned
Inventory turnover
Profit margin ratio
Return on common stockholders’ equity
Return on assets

Perform
horizontal and vertical analysis on Westward’s financial statements, show
your results. (3.0 points)

Assess the
financial performance of Westward, given the analysis tools used in
questions 1 and 2 above. (5.3 points)

If the company
wanted to perform industry comparison analysis, what references would you
recommend it use? (1.5 points)

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