E13-1
Pioneer Corporation had these transactions during 2011.
(a)Issued $50,000 par value common stock for cash.
(b)Purchased a machine for $30,000, giving a long-term note in exchange.
(c)Issued $200,000 par value common stock upon conversion of bonds having a face value of
$200,000.
(d)Declared and paid a cash dividend of $18,000.
(e)Sold a long-term investment with a cost of $15,000 for $15,000 cash.
(f)Collected $16,000 of accounts receivable.
(g)Paid $18,000 on accounts payable.
Instructions
Analyze the transactions and indicate whether each transaction resulted in a cash flow from
operating activities, investing activities, financing activities, or noncash investing and financing
activities
E13-8
Here are comparative balance sheets for Taguchi Company.
TAGUCHI COMPANY
Comparative Balance Sheets
December 31
Assets 2011 2010
Cash $ 73,000 $ 22,000
Accounts receivable 85,000 76,000
Inventories 170,000 189,000
Land 75,000 100,000
Equipment 260,000 200,000
Accumulated depreciation (66,000) (32,000)
Total $597,000 $555,000
Liabilities and Stockholders Equity
Accounts payable $ 39,000 $ 47,000
Bonds payable 150,000 200,000
Common stock ($1 par) 216,000 174,000
Retained earnings 192,000 134,000
Total $597,000 $555,000
Additional information:
1.Net income for 2011 was $103,000.
2.Cash dividends of $45,000 were declared and paid.
3.Bonds payable amounting to $50,000 were redeemed for cash $50,000.
4.Common stock was issued for $42,000 cash.
5.No equipment was sold during 2011, but land was sold at cost.
Instructions
Prepare a statement of cash flows for 2011 using the indirect method.
E13-8
Here are comparative balance sheets for Taguchi Company.
TAGUCHI COMPANY
Comparative Balance Sheets
December 31
Assets 2011 2010
Cash $ 73,000 $ 22,000
Accounts receivable 85,000 76,000
Inventories 170,000 189,000
Land 75,000 100,000
Equipment 260,000 200,000
Accumulated depreciation (66,000) (32,000)
Total $597,000 $555,000
Liabilities and Stockholders Equity
Accounts payable $ 39,000 $ 47,000
Bonds payable 150,000 200,000
Common stock ($1 par) 216,000 174,000
Retained earnings 192,000 134,000
Total $597,000 $555,000
Additional information:
1.Net income for 2011 was $103,000.
2.Cash dividends of $45,000 were declared and paid.
3.Bonds payable amounting to $50,000 were redeemed for cash $50,000.
4.Common stock was issued for $42,000 cash.
5.No equipment was sold during 2011, but land was sold at cost.
Instructions
Prepare a statement of cash flows for 2011 using the indirect method.
14-1
Financial information for Blevins Inc. is presented below.
December 31, 2009 December 31, 2008
Current assets $125,000 $100,000
Plant assets (net) 396,000 330,000
Current liabilities 91,000 70,000
Long-term liabilities 133,000 95,000
Common stock, $1 par 161,000 115,000
Retained earnings 136,000 150,000
Instructions:
Prepare a schedule showing a horizontal analysis for 2009 using 2008 as the base year.
P13-9A
Condensed financial data of Arma Inc. follow.
ARMA INC.
Comparative Balance Sheets
December 31
Assets 2011 2010
Cash $ 90,800 $ 48,400
Accounts receivable 92,800 33,000
Inventories 112,500 102,850
Prepaid expenses 28,400 26,000
Investments 138,000 114,000
Plant assets 270,000 242,500
Accumulated depreciation (50,000) (52,000)
Total $682,500 $514,750
Liabilities and Stockholders Equity
Accounts payable $112,000 $ 67,300
Accrued expenses payable 16,500 17,000
Bonds payable 110,000 150,000
Common stock 220,000 175,000
Retained earnings 224,000 105,450
Total $682,500 $514,750
ARMA INC.
Income Statement
For the Year Ended December 31, 2011
Sales $392,780
Less:
Cost of goods sold $135,460
Operating expenses, excluding
depreciation 12,410
Depreciation expense 46,500
Income taxes 27,280
Interest expense 4,730
Loss on sale of plant assets 7,500 233,880
Net income $158,900
Additional information:
1.New plant assets costing $85,000 were purchased for cash during the year.
2.Old plant assets having an original cost of $57,500 were sold for $1,500 cash.
3.Bonds matured and were paid off at face value for cash.
4.A cash dividend of $40,350 was declared and paid during the year.
Instructions
Prepare a statement of cash flows using the indirect method.
P13-10A
Data for Arma Inc. are presented in P13-9A. Further analysis reveals that accounts
payable pertain to merchandise creditors.
Instructions
Prepare a statement of cash flows for Arma Inc. using the direct method.
P14-2A
The comparative statements of Villa Tool Company are presented below.
VILLA TOOL COMPANY
Income Statements
For the Years Ended December 31
2012 2011
Net sales $1,818,500 $1,750,500
Cost of goods sold 1,011,500 996,000
Gross profit 807,000 754,500
Selling and administrative expense 516,000 479,000
Income from operations 291,000 275,500
Other expenses and losses
Interest expense 18,000 14,000
Income before income taxes 273,000 261,500
Income tax expense 81,000 77,000
Net income $ 192,000 $ 184,500
VILLA TOOL COMPANY
Balance Sheets
December 31
Assets 2012 2011
Current assets
Cash $ 60,100 $ 64,200
Short-term investments 69,000 50,000
Accounts receivable (net) 117,800 102,800
Inventory 123,000 115,500
Total current assets 369,900 332,500
Plant assets (net) 600,300 520,300
Total assets $970,200 $852,800
Liabilities and Stockholders Equity
Current liabilities
Accounts payable $160,000 $145,400
Income taxes payable 43,500 42,000
Total current liabilities 203,500 187,400
Bonds payable 200,000 200,000
Total liabilities 403,500 387,400
Stockholders equity
Common stock ($5 par) 280,000 300,000
Retained earnings 286,700 165,400
Total stockholders equity 566,700 465,400
Total liabilities and stockholders equity $970,200 $852,800
Instructions
Compute the following ratios for 2012. (Weighted-average common shares in 2012 were 57,000,
and all sales were on account.)
(a)Earnings per share. (f)Receivables turnover.
(b)Return on common stockholders equity. (g)Inventory turnover.
(c)Return on assets. (h)Times interest earned.
(d)Current. (i)Asset turnover.
(e)Acid-test. (j)Debt to total assets.
716 Chapter 14 Financial Statement Analysis
Compute ratios from balance
sheet and income statement.