Question 1 Your answer is partially correct. Try again. Condensed financial data of Odgers Inc.

| June 3, 2016

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Question 1
Your answer is partially correct. Try again.
Condensed financial data of Odgers Inc. follow.
ODGERS INC.
Comparative Balance Sheets
December 31
Assets

2014

Cash

2013

$ 151,096

$ 90,508

Accounts receivable

164,186

71,060

Inventory

210,375

192,330

53,108

48,620

Long-term investments

258,060

203,830

Plant assets

532,950

453,475

Prepaid expenses

Accumulated depreciation
Total

(93,500 )

(97,240 )

$1,276,275

$962,583

$ 190,740

$ 125,851

30,855

39,270

Bonds payable

205,700

273,020

Common stock

411,400

327,250

Liabilities and Stockholders Equity
Accounts payable
Accrued expenses payable

Retained earnings

437,580

197,192

$1,276,275

Total

$962,583

ODGERS INC.
Income Statement Data
For the Year Ended December 31, 2014
Sales revenue

$726,420

Less:
Cost of goods sold

$253,310

Operating expenses, excluding depreciation

23,207

Depreciation expense

86,955

Income tax expense

51,014

Interest expense
Loss on disposal of plant assets
Net income
Additional information:

8,845
14,025

437,356
$ 289,064

1. New plant assets costing $187,000 were purchased for cash during the year.
Old plant assets having an original cost of $107,525 and accumulated depreciation of
2.
$90,695 were sold for $2,805 cash.
3. Bonds payable matured and were paid off at face value for cash.
4. A cash dividend of $48,676 was declared and paid during the year.
Prepare a statement of cash flows using the indirect method. (Show amounts that decrease
cash flow with either a – sign e.g. -15,000 or in parenthesis e.g. (15,000).)
ODGERS INC.
Statement of Cash Flows
For the Year Ended December 31, 2014
Cash Flow s from Financing Activities

Net Income

$

Adjustments to reconcile net income to
Cash Flow s from Operating Activities

Decrease in Accrued Expenses Payable

Increase in Accounts Payable

Increase in Accounts Receivable

Depreciation Expense

Loss on Disposal of Plant Assets

Decrease in Prepaid Expenses

$

Cash at Beginning of Period

Cash at End of Period

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Question 2

Condensed financial data of Odgers Inc. follow.

$

ODGERS INC.
Comparative Balance Sheets
December 31
Assets

2014

Cash

2013

$ 187,456

$ 112,288

Accounts receivable

203,696

88,160

Inventory

261,000

238,612

65,888

60,320

Long-term investments

320,160

252,880

Plant assets

661,200

562,600

Prepaid expenses

Accumulated depreciation
Total

(116,000 )

(120,640 )

$1,583,400

$1,194,220

$ 236,640

$ 156,136

38,280

48,720

Bonds payable

255,200

338,720

Common stock

510,400

406,000

Liabilities and Stockholders Equity
Accounts payable
Accrued expenses payable

Retained earnings

542,880

244,644

$1,583,400

Total

$1,194,220

ODGERS INC.
Income Statement Data
For the Year Ended December 31, 2014
Sales revenue

$901,227

Less:
Cost of goods sold
Operating expenses, excluding depreciation
Depreciation expense

$314,267
28,791
107,880

Income taxes

63,290

Interest expense

10,974

Loss on disposal of plant assets

17,400

Net income

542,602
$ 358,625

Additional information:
1. New plant assets costing $232,000 were purchased for cash during the year.
Old plant assets having an original cost of $133,400 and accumulated depreciation of
2.
$112,520 were sold for $3,480 cash.
3. Bonds payable matured and were paid off at face value for cash.
4. A cash dividend of $60,389 was declared and paid during the year.
Further analysis reveals that accounts payable pertain to merchandise creditors.
Prepare a statement of cash flows for Odgers Inc. using the direct method. (Show amounts
that decrease cash flow with either a – sign e.g. -15,000 or in parenthesis e.g.
(15,000).)

ODGERS INC.
Statement of Cash Flows
For the Year Ended December 31, 2014

$
:
$

$
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Question 3
The comparative statements of Osborne Company are presented here.
OSBORNE COMPANY
Income Statements
For the Years Ended December 31
2014
Net sales

2013

$1,895,852

Cost of goods sold

$1,755,812

1,063,852

1,011,312

Gross profit

832,000

744,500

Selling and administrative expenses

505,312

484,312

Income from operations

326,688

260,188

23,178

21,178

303,510

239,010

93,178

74,178

$ 210,332

$ 164,832

Other expenses and losses
Interest expense
Income before income taxes
Income tax expense
Net income

OSBORNE COMPANY
Balance Sheets
December 31
Assets

2014

2013

Current assets
Cash

$ 60,100

$ 64,200

74,000

50,000

Accounts receivable

123,112

108,112

Inventory

127,178

116,678

384,390

338,990

663,004

534,304

$1,047,394

$873,294

$ 165,312

$150,712

Debt investments (short-term)

Total current assets
Plant assets (net)
Total assets
Liabilities and Stockholders Equity
Current liabilities
Accounts payable
Income taxes payable
Total current liabilities
Bonds payable
Total liabilities

44,678

43,178

209,990

193,890

234,004

214,004

443,994

407,894

Stockholders equity
Common stock ($5 par)

290,000

300,000

Retained earnings

313,400

165,400

Total stockholders equity

603,400

465,400

$1,047,394

Total liabilities and stockholders equity

$873,294

All sales were on account. Net cash provided by operating activities for 2014 was $250,700.
Capital expenditures were $136,200, and cash dividends were $62,332.
Compute the following ratios for 2014. (Round all answers to 2 decimal places, e.g. 1.83 or
12.61%.)
(a)

Earnings per share

(b)

Return on common stockholders equity

%

(c)

Return on assets

%

(d)

Current ratio

:1

(e)

Accounts receivable turnover

times

(f)

Average collection period

days

(g)

Inventory turnover

(h)

Days in inventory

days

(i)

Times interest earned

times

(j)

Asset turnover

times

(k)

Debt to assets

%

(l)

Current cash debt coverage

times

$

times

(m) Cash debt coverage
(n)

Free cash flow

times
$

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